Britaniacrest Recycling Ltd - Limited company accounts 20.1

REGISTERED NUMBER: 02798579 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 APRIL 2021

FOR

BRITANIACREST RECYCLING LTD

Page

Company Information

1

Strategic Report

2

Report of the Directors

5

Report of the Independent Auditors

7

Income Statement

11

Other Comprehensive Income

12

Statement of Financial Position

13

Statement of Changes in Equity

14

Notes to the Financial Statements

15

DIRECTORS:

R Foss

Mrs L K Foss

C A Foss

R C Foss

Mrs R A Rowe

R D Foss

W A Pyke

SECRETARY:

Mrs L K Foss

REGISTERED OFFICE:

26 Reigate Road

Hookwood

Horley

Surrey

RH6 0HJ

REGISTERED NUMBER:

02798579 (England and Wales)

AUDITORS:

Vista Audit LLP

Chartered Accountants

Statutory Auditor

Chancery House

3 Hatchlands Road

Redhill

Surrey

RH1 6AA

The directors present their strategic report for the year ended 30 April 2021.

REVIEW OF BUSINESS

The directors are pleased with the performance of the company in what has been a difficult environment.

The UK Government's strict lockdown measures impacted activity in the year, however, the directors are pleased that they were able to minimise its effect and the resulting reduction in turnover was just 5.4%. Strict cost control and monitoring of expenditure has resulted in an increase in profitability in what has been a very difficult period.

The directors are optimistic that trading conditions will continue to improve and are encouraged that in the final quarter of the year turnover had improved to an annualised amount of in excess of £21m, back to 2019 levels the last full year not to have been impacted by the pandemic.

The national lockdown restrictions ceased altogether in July 2021 and trading has continued to improve as a result. The Directors anticipate that the company will continue to be profitable in the following year and that trade will continue to improve.

The directors remain committed to constant evolution and investment in modern waste technology resulting in increased capacity and continued growth. The company helps clients manage their resources efficiently and effectively. The company has three Material Recycling Facilities (MRFs) located at Hookwood, Horley, Storrington and Warnham. These MRFs have the capability to recycle 90% of the waste received on site. The waste is then converted into refuse derived fuel (RDF) for the European market so that landfill is used as a last resort for the remainder of the unrecyclable waste.

PRINCIPAL RISKS AND UNCERTAINTIES

There are a number of potential risks and uncertainties which could have a material impact on the company's performance and could cause actual results to differ materially from expected and historical results.

1. Exposure to bad debts

The directors minimise the exposure to this risk by regular management reviews of trade debts and the credit worthiness of key customers.

2. Economic recession/worsening financial markets

The company operates with low fixed overheads so it is able to respond quickly to changes in the economic environment and has no reliance on external finance.

The company has non complex financial instruments which consist of bank balances, trade debtors, other debtors, trade creditors and other creditors. The main purpose is to ensure funds are in place to provide sufficient working capital for the company's current and future operations.

3. Price risk

Due to the nature of the financial instruments used by the company there is no exposure to price risk.

4. Liquidity/cashflow risk

The company actively manages the bank balances daily to ensure that it has sufficient available funds for operation.

The trade creditor liquidity risk is also managed by ensuring that sufficient funds are available to meet the amounts payable.

5. Credit risk

The directors minimise the exposure to this risk by regular management reviews of trade debts and the credit worthiness of key customers.

6. Health and safety

It is the company's policy to comply with the terms of the Health and Safety at Work Act 1974, and subsequent legislation, and to provide and maintain a healthy and safe working environment.

The health and safety objective of the company is to minimise the number of instances of occupational accidents and illnesses and ultimately achieve an accident-free workplace.

The company takes its health and safety obligations very seriously and manages this risk via a Health and Safety Committee which meets on a quarterly basis to review procedures, incidents and the company's response to changes in legislation.

In response to the coronavirus outbreak the Health and Safety procedures had to be reviewed, the following measures were implemented and continue to be adhered to in accordance with government guidance:

- Carrying out COVID-19 risk assessments and sharing the results with staff

- Implementing strict cleaning, hand washing and hygiene procedures

- Taking all reasonable steps to assist staff with working from home

- Taking all reasonable steps to maintain a two metre distance in the workplace

- Where a two metre distance is not achievable a one metre distance is ensured and all actions are taken to manage transmission risk.

KEY PERFORMANCE INDICATORS

The Directors consider the following to be key performance indicators:

Turnover

Turnover decreased to £16,676,999 from £17,636,522 in 2020. The reduction in turnover of 5.4% for the year (2020: reduction of 17.8%) is in line with expectations given that the COVID-19 pandemic and subsequent lockdown requirements were in force throughout the year.

Gross profit margin

The gross profit margin has increased for the year to 56.73% (2020: 54.2%). The decrease in the use of subcontractors in favour of the utilisation of their own workforce has been the main driver behind the increase.

Debtor days

Debtor days have reduced to 34 (2020: 46) as a result of continued good debt management procedures.

Waste recycling

The company aims to recycle at least 90% of the waste entering its transfer station and in 2021 this number was achieved.

ON BEHALF OF THE BOARD:

R Foss - Director

14 October 2021

The directors present their report with the financial statements of the company for the year ended 30 April 2021.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of industrial recycling and waste disposal.

DIVIDENDS

No dividends will be distributed for the year ended 30 April 2021.

FUTURE DEVELOPMENTS

Public awareness of legislation to protect the environment by reducing waste and recycling is gaining momentum and this is expected to have a beneficial impact on the future of the business.

The directors are closely involved in the day to day running of the business and whilst pleased with progress will not become complacent and will continue to look at ways to improve performance.

DIRECTORS

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

R Foss

Mrs L K Foss

C A Foss

R C Foss

Mrs R A Rowe

R D Foss

W A Pyke

POLITICAL DONATIONS AND EXPENDITURE

The company made donations totalling £nil (2020: £10,000) to political parties during the year ended 30 April 2021.

GOING CONCERN

The company meets its day-to-day working capital requirements through its cash reserves. The company's forecasts and projections, taking account of reasonable changes in trading performance, show that the company is able to operate within the level of its current facilities and has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

DISCLOSURE IN THE STRATEGIC REPORT

The company has chosen in accordance with Section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 to set out within the company's Strategic Report the Company's Strategic Report Information Required by Schedule 7 of the Large and Medium Sized Companies and Groups (Accounts and Reports) Regulation 2008. This includes information that would have been included in the business review and details of the principal risks and uncertainties.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

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

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

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

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

AUDITORS

The auditors, Vista Audit LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

R Foss - Director

14 October 2021

Opinion

We have audited the financial statements of Britaniacrest Recycling Ltd (the 'company') for the year ended 30 April 2021 which comprise the Income Statement, Other Comprehensive Income, Statement of Financial Position, 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 30 April 2021 and of its profit for the year then ended;

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

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

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

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

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

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

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page six, 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.

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:

The objectives of our audit:

-

in respect of fraud, are to identify and assess the risks of material misstatement of the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management; and

-

in respect of irregularities, considered to be non-compliance with laws and regulations, are to obtain sufficient appropriate audit evidence regarding compliance with the provisions of those laws and regulations generally recognised to have a direct effect on the determination of material amounts and disclosures in the financial statements, and perform other audit procedures to help identify instances of non-compliance with other laws and regulations that may have a material effect on the financial statements. We are not responsible for preventing non-compliance with laws and regulations and our audit procedures cannot be expected to detect non-compliance with all laws and regulations.

Our approach was as follows:

-

We obtained an understanding of the legal and regulatory frameworks that are applicable to the company through discussions with management and from our commercial knowledge and previous experience of this specific business sector. We determined that the most significant frameworks which are directly relevant to specific assertions in the financial statements are those that relate to the reporting framework (FRS 102), the relevant tax compliance regulations in the UK, data protection, anti bribery, employment, environmental and health and safety legislation.

-

We obtained a general understanding of how the company complies with these legal and regulatory frameworks by making enquiries of management and those responsible for legal and compliance matters. We also reviewed minutes of the Board and gained an understanding of the company's approach to governance.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Susan Jones (Senior Statutory Auditor)

for and on behalf of Vista Audit LLP

Chartered Accountants

Statutory Auditor

Chancery House

3 Hatchlands Road

Redhill

Surrey

RH1 6AA

14 October 2021

TURNOVER

4

16,676,999

17,636,522

Cost of sales

7,217,544

8,079,478

GROSS PROFIT

9,459,455

9,557,044

Administrative expenses

7,194,050

7,617,089

2,265,405

1,939,955

Other operating income

246,960

113,403

OPERATING PROFIT

7

2,512,365

2,053,358

Interest receivable and similar income

17,552

55,852

2,529,917

2,109,210

Interest payable and similar expenses

8

4,823

9,997

PROFIT BEFORE TAXATION

2,525,094

2,099,213

Tax on profit

9

445,232

412,574

PROFIT FOR THE FINANCIAL YEAR

2,079,862

1,686,639

PROFIT FOR THE YEAR

2,079,862

1,686,639

OTHER COMPREHENSIVE INCOME

Revaluation of investments

200,094

(36,522

)

Income tax relating to other comprehensive income

(38,017

)

6,939

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

162,077

(29,583

)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

2,241,939

1,657,056

FIXED ASSETS

Tangible assets

11

1,913,567

3,330,865

Investments

12

1,275,475

975,381

3,189,042

4,306,246

CURRENT ASSETS

Debtors

13

3,274,556

2,985,141

Cash at bank and in hand

8,264,850

9,064,070

11,539,406

12,049,211

CREDITORS

Amounts falling due within one year

14

3,057,994

6,857,979

NET CURRENT ASSETS

8,481,412

5,191,232

TOTAL ASSETS LESS CURRENT LIABILITIES

11,670,454

9,497,478

CREDITORS

Amounts falling due after more than one year

15

-

68,963

NET ASSETS

11,670,454

9,428,515

CAPITAL AND RESERVES

Called up share capital

20

11,000

11,000

Retained earnings

11,659,454

9,417,515

SHAREHOLDERS' FUNDS

11,670,454

9,428,515

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

R Foss - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 May 2019

11,000

12,760,460

12,771,460

Changes in equity

Dividends

-

(5,000,001

)

(5,000,001

)

Total comprehensive income

-

1,657,056

1,657,056

Balance at 30 April 2020

11,000

9,417,515

9,428,515

Changes in equity

Total comprehensive income

-

2,241,939

2,241,939

Balance at 30 April 2021

11,000

11,659,454

11,670,454

1.	STATUTORY INFORMATION

Britaniacrest Recycling Ltd 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 Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

All amounts in the financial statements have been rounded to the nearest £.

2.	STATEMENT OF COMPLIANCE

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

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

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

The company meets its day-to-day working capital requirements through its cash reserves. The company's forecasts and projections, taking account of reasonable changes in trading performance, show that the company is able to operate within the level of its current facilities and has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

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 33.7.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Significant judgements and estimates

In preparing these financial statements, the directors have made the following judgements:

- Determine whether leases entered into by the company either as a lessor or a lessee are operating lease or finance leases. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis.

- Determine whether there are indicators of impairment of the company's tangible and intangible assets, including goodwill. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and where it is a component of a larger cash-generating unit, the viability and expected future performance of that unit. At each reporting period 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.

Other key sources of estimation uncertainty

Tangible fixed assets

Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.

Turnover

Turnover represents net invoiced sales of services in connection with the recycling industry, excluding value added tax, except in respect of service contracts where turnover is recognised when the company obtains the right to consideration.

Turnover is recognised at the date the waste is delivered to the recycling site.

Tangible fixed assets

All fixed assets are initially recorded at cost.

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

Improvements to property - 25% on cost

Plant and machinery - 25% on cost

Fixtures and fittings - 25% on cost

Motor vehicles - 25% on cost

Computer equipment - 25% on cost

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, if there is an indication of a significant change since the last reporting date.

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

Government grants

A government grant is recognised only when there is reasonable assurance that the entity will comply with any conditions attached to the grant and the grant will be received.

A government grant is recognised in income on a systematic basis over the periods in which the entity recognises related costs for which the grant is intended to compensate. A grant becomes receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity when no future related costs will be recognised in income in the period in which it becomes receivable.

Financial instruments

Basic financial assets, which include trade debtors, other debtors and cash and bank balances, are initially measured at the transaction price including transaction costs and are subsequently recognised at amortised cost.

Basic financial liabilities, including trade creditors, other creditors, amount due to hire purchase contracts and loans from fellow group companies are initially recognised at transaction price and are subsequently recognised at amortised cost.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position 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.

Valuation of investments

Investments in unlisted company shares, which have been classified as fixed asset investments as the company intends to hold them on a continuing basis, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in other comprehensive income for the period.

Investments in listed company shares, which have been classified as fixed asset investments, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in other comprehensive income for the period.

Hire purchase and leasing commitments

Where assets are financed by leasing agreements that give rights approximately to ownership (finance leases), the assets are treated as if they has been purchased outright. The amount capitalised is the present value of the minimum lease payments payable over the term of the lease. The corresponding leasing commitments are shown as amounts payable to the lessor. Depreciation on the relevant assets is charged to profit or loss over the shorter of estimated useful economic life and the term of the lease.

Lease payments are analysed between capital and interest components so that the interest element of the payment is charged to profit or loss over the term of the lease and is calculated so that it represents a constant proportion of the balance of capital repayments outstanding. The capital part reduces the amounts payable to the lessor.

Rentals paid under operating leases are charged to profit and loss on a straight line basis over the period of the lease.

Pension costs

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

Interest receivable and interest payable

Interest income and interest payable are recognised in profit and loss as they accrue, using the effective interest method.

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting. Dividends on shares recognised as liabilities are recognised as expenses and classified within interest payable.

Holiday pay accrual

A liability is recognised to the extent of any unused holiday pay entitlement which has accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date.

4.

TURNOVER

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

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

2021

2020

£

£

Sales of goods

417,737

230,585

Sales of services

16,259,262

17,405,937

16,676,999

17,636,522

5.	EMPLOYEES AND DIRECTORS

2021

2020

£

£

Wages and salaries

3,137,656

3,570,458

Social security costs

340,071

381,770

Other pension costs

319,651

64,729

3,797,378

4,016,957

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

2021

2020

Directors

7

7

Staff

72

86

79

93

6.	DIRECTORS' EMOLUMENTS

2021

2020

£

£

Directors' remuneration

907,557

1,020,539

Directors' pension contributions to money purchase schemes

261,155

1,089

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

Money purchase schemes

7

7

Information regarding the highest paid director is as follows:

2021

2020

£

£

Emoluments etc

164,716

171,531

7.	OPERATING PROFIT

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

2021

2020

£

£

Hire of plant and machinery

55,052

42,282

Property rental

981,500

981,500

Depreciation - owned assets

1,330,343

1,634,374

Depreciation - assets on hire purchase contracts

171,820

276,485

Profit on disposal of fixed assets

(22,733

)

(328,769

)

Auditors' remuneration

20,035

19,465

Government grants

(246,714

)

(113,403

)

Changes in fair value of investments

(200,094

)

36,522

8.

INTEREST PAYABLE AND SIMILAR EXPENSES

2021

2020

£

£

Hire purchase interest

4,823

9,997

9.

TAXATION

Analysis of the tax charge

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

2021

2020

£

£

Current tax:

UK corporation tax

610,759

360,700

Deferred tax

(165,527

)

51,874

Tax on profit

445,232

412,574

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2021

2020

£

£

Profit before tax

2,525,094

2,099,213

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

479,768

398,850

Effects of:

Expenses not deductible for tax purposes

(34,536

)

13,724

Total tax charge

445,232

412,574

Tax effects relating to effects of other comprehensive income

2021

Gross

Tax

Net

£

£

£

Revaluation of investments

200,094

(38,017

)

162,077

2020

Gross

Tax

Net

£

£

£

Revaluation of investments

(36,522

)

6,939

(29,583

)

10.

DIVIDENDS

2021

2020

£

£

Ordinary shares of £1 each

Interim

-

5,000,001