H.W. Martin (Fencing Contractors) Limit - Limited company accounts 20.1

REGISTERED NUMBER: 01270837 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2021

FOR

H W MARTIN (FENCING CONTRACTORS) LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Independent Auditor's Report

6

Statement of Income and Retained Earnings

10

Statement of Financial Position

11

Notes to the Financial Statements

12

DIRECTORS:

H W Martin

K Martin

N C Faulconbridge

B Stone

REGISTERED OFFICE:

Fordbridge Lane

Blackwell

Alfreton

Derbyshire

DE55 5JY

REGISTERED NUMBER:

01270837 (England and Wales)

INDEPENDENT AUDITOR:

BDO LLP, statutory auditor

Two Snowhill

Birmingham

B4 6GA

The Directors present their Strategic report for H W Martin (Fencing Contractors) Limited ("the Company") for the year-ended 31 July 2021.

PRINCIPAL ACTIVITIES AND BUSINESS REVIEW

The principal activities of the Company during the year under review were those of:

-

installing all types of fencing and perimeter systems to the civil engineering, highways and rail industries;

-

vegetation control and management;

-

ancillary civil engineering works; and

-

ecology services.

The Company is part of the H W Martin Group of Companies (the "Group") headed by H W Martin Holdings Limited.

The Company's profit for the financial year is £1,701,169 (2020: £998,131 profit).

The Company's key financial and performance indicators for the year are:

1.

Turnover increased by 33% to £18.0 million (2020: increased by 47% to £13.5 million); and

2.

Profit before tax margin increased by 2.4 percentage points to 11.5% from 9.1%.

The Company has performed exceptionally well to deliver a very significant increase in sales whilst also improving net profit margin. The already robust balance sheet has strengthened further as profits have been reinvested in the business.

Further additions to the Company's senior management have ensured outstanding performance on significant contracts; notably the Network Rail Fencing Renewals Framework Contract (a successful procurement process providing for a further appointed term) and HS2 Enabling Works.

The availability of significant Group capital investment provides the Company with a sound platform on which to further increase the volume of works deliverable and broaden the portfolio of services we can offer our clients.

Continuity of the level of business activity and opportunities for further expansion will be provided by existing contracts and Client base, including the long term HS2 rail project which has now moved to the Permanent Works phase.

The Company continues to look to ways to improve its environmental performance and reduce the environmental impact of its activities and remains committed to a management system conforming to the 14001 Environmental Standard.

PRINCIPAL RISKS AND UNCERTAINTIES

The identification, assessment and management of opportunities and associated risks are an integral element of the business. Principal risks are:

Legislation and regulation

The impact of new legislation and regulation on operations may potentially increase costs. This risk is considered as a part of the tender approval process. Many contracts include provisions which allow the Company to pass increased costs so arising to the client.

Competitive risk

All major contracts are subject to periodic competitive tender and therefore the renewal of these contracts is not guaranteed. The Company continues to maintain a very competitive cost base to give the best possible commercial advantage and actively targets long-term contracts. The continuation of the government's HS2 project is subject to review and "political will".

Health and safety

The Company acknowledges that its employees work within a hazardous environment and training is given to reflect and mitigate this risk. Policies and procedures are continually monitored and reviewed. The Group maintains its commitment to the 45001 Safety Management System and to the Contractors Health and Safety Scheme (CHAS).

Financial risk

The main risk arising from the Company's financial instruments is liquidity risk. This risk is managed by maintaining a high cash reserve and by capital funding from the Group providing sufficient liquidity to finance the Company's operations and to meet unanticipated costs.

ON BEHALF OF THE BOARD:

N C Faulconbridge - Director

17 December 2021

The Directors present their report with the financial statements of the Company for the year-ended 31 July 2021.

DIVIDENDS

No interim dividend was paid during the year. The directors recommend a final dividend of £200.00 per share.

The total distribution of dividends for the year ended 31 July 2021 will be £ 1,000,000 .

FUTURE DEVELOPMENTS

The Company is stable and will continue to invest in its existing operations going forwards so as to maximise revenues, profits and cash flows.

DIRECTORS

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

H W Martin

K Martin

N C Faulconbridge

Other changes in directors holding office are as follows:

B Stone - appointed 25 August 2020

BREXIT RISK

The Directors are continuing to monitor the potential impact on its customers and suppliers, market access and possible effects on foreign currency exchange rates.

GOING CONCERN

The Company funds both day-to-day operations and longer-term strategic development from its liquid resources, including working capital generated from operations. The Directors have considered the level of the liquid resources and the expected future profitability of both the Company and the wider Group, and are satisfied that, under anticipated trading conditions, there are sufficient available resources for the Company to meet its trading requirements through a period of at least 12 months from the date of signing these financial statements to 31 January 2023. For this reason, they have concluded that it is appropriate to use the going concern basis on presenting these financial statements.

COVID-19

Since 31 December 2019, the spread of COVID-19 has severely impacted many local economies around the globe. The Directors have considered the reasonably plausible impact of the COVID-19 outbreak on the Company's trading and cash flows. The Directors consider the potential impact of COVID-19 to be minimal on the grounds of the Company's performance since the outbreak began and post year-end, the type of service they provide as a Company and the continued liquidity support of the Group.

ENGAGEMENT WITH EMPLOYEES

A policy of equal opportunity employment is followed at all times by the Company. During the year, the policy of providing employees with information about the Company has been continued through internal media methods in which employees have also been encouraged to present their suggestions and views on the Company's performance. Regular meetings are held between local management and employees to allow a free flow of information and ideas.

The Company gives full consideration to applications for employment from disabled persons where the requirements of the job can be adequately fulfilled by a handicapped or disabled person. Where existing employees become disabled, it is the Company's policy wherever practicable to provide continuing employment under normal terms and conditions and to provide training and career development and promotion to disabled employees wherever appropriate.

DIRECTORS' RESPONSIBILITIES STATEMENT

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.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITOR

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 auditor is 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 auditor is aware of that information.

AUDITOR

The auditor, BDO LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

N C Faulconbridge - Director

17 December 2021

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report other than the financial statements and our auditor's report 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. 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 course of 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.

Other Companies Act 2006 reporting

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.

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 in relation to which 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 Directors' Responsibilities Statement, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Auditor's 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 an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Extent to which the audit was capable of detecting irregularities, including fraud

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:

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:

-

We made enquiries of management and the directors concerning the Company's policies and procedures relating to:

-

identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;

-

detecting and responding to the risks of fraud and whether they had knowledge of any actual, suspected or alleged fraud; and

-

the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.

We corroborated our enquires through the review of board minutes.

-

We obtained an understanding of the legal and regulatory frameworks applicable to the Company based on our understanding of the business, sector experience and discussions with management. The most significant considerations for the Company are compliance with UK Accounting Standards, the Companies Act 2006, corporate taxes, VAT legislation, employment taxes and health and safety legislation.

-

We discussed amongst the engagement team to assess how and where fraud might occur in the financial statements, any potential indicators of fraud and non-compliance with laws and regulation.

Based on our understanding of the environment and assessment of the incentive and opportunity for fraud and non-compliance with laws and regulations gained from the above work we designed and executed the following procedures:

-

We reviewed correspondence with the relevant authorities to identify any irregularities or instances of non-compliance with laws and regulations.

-

We tested the appropriateness of accounting journals and other adjustments made in the preparation of the financial statements. We obtained a complete population of all journals in the year and test any which we considered were indicative of management override.

-

We reviewed the Company's accounting policies for non-compliance with relevant standards. Our work also included considering significant accounting estimates for evidence of misstatement or possible bias and testing any significant transactions that appeared to be outside the normal course of business.

-

We also tested manual journals posted to revenue that were either material or fell outside of our expectations based on our understanding of the Company, agreeing them to supporting documentation to check that they were appropriate, correctly recorded and supported by appropriate evidence.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

A further description of our responsibilities is available on the Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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 an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Gareth Singleton (Senior Statutory Auditor)

for and on behalf of BDO LLP, statutory auditor

Two Snowhill

Birmingham

B4 6GA

20 December 2021

BDO LLP is a limited liability partnership registered in England and Wales (with

registered number OC305127).

TURNOVER

4

18,038,827

13,515,056

Cost of sales

(13,004,759

)

(9,023,052

)

GROSS PROFIT

5,034,068

4,492,004

Administrative expenses

(2,951,310

)

(3,262,174

)

PROFIT BEFORE TAXATION

7

2,082,758

1,229,830

Tax on profit

9

(381,589

)

(231,699

)

PROFIT FOR THE FINANCIAL YEAR

1,701,169

998,131

Retained earnings at beginning of year

4,960,076

4,211,945

Dividends

10

(1,000,000

)

(250,000

)

RETAINED EARNINGS AT END OF YEAR

5,661,245

4,960,076

FIXED ASSETS

Tangible assets

11

1,327,345

354,347

CURRENT ASSETS

Stocks

12

510,456

744,127

Debtors: amounts falling due within one year

13

2,964,241

3,671,022

Cash at bank

2,512,153

2,013,955

5,986,850

6,429,104

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

14

1,647,950

1,818,375

NET CURRENT ASSETS

4,338,900

4,610,729

TOTAL ASSETS LESS CURRENT LIABILITIES

5,666,245

4,965,076

CAPITAL AND RESERVES

Called up share capital

16

5,000

5,000

Retained earnings

17

5,661,245

4,960,076

SHAREHOLDERS' FUNDS

5,666,245

4,965,076

The financial statements were approved by the Board of Directors and authorised for issue on 17 December 2021 and were signed on its behalf by:

N C Faulconbridge - Director

1.	STATUTORY INFORMATION

H W Martin (Fencing Contractors) 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 Company Information page.

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.

Going concern

The Company funds both day-to-day operations and longer-term strategic development from its liquid resources, including working capital generated from operations. The Directors have considered the level of the liquid resources and the expected future profitability of both the Company and the wider Group, and are satisfied that, under anticipated trading conditions, there are sufficient available resources for the Company to meet its trading requirements through a period of at least 12 months from the date of signing these financial statements to 31 January 2023. For this reason, they have concluded that it is appropriate to use the going concern basis on presenting these financial statements.

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 requirements of paragraphs 26.18(b), 26.19 to 26.21 and 26.23;

•

the requirement of paragraph 33.7.

Turnover

Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

i. Sale of services

The Company provides design and installation services of all types of fencing and perimeter systems to the civil engineering, highways and rail industries. The Company also provides vegetation control and management, ancillary civil engineering and ecology services. Turnover is determined by reference to the value of the work carried out to date in the accounting period in which the services are rendered and when the outcome of the contract can be estimated reliably. No profit is recognised until the contract has advanced to a stage where the total profit can be assessed with reasonable certainty. Provision is made for the full amount of foreseeable losses on contracts. Amounts recognised as turnover where contract progress is sufficient to do so are included on the statement of financial position as amounts receivable on contracts.

Tangible fixed assets

Stocks

Financial instruments

The Company only enters into basic financial instruments transactions that result in the recognition of basic financial assets and liabilities. The Company has chosen to adopt the Section 11 of FRS 102 in respect of financial instruments.

i. Financial assets

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

At the end of each reporting period, financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in the Income Statement.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in the Income Statement.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

ii. Financial liabilities

Basic financial liabilities, including trade and other creditors that are classified as debt, 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 payments discounted at a market rate of interest.

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. Trade creditors 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 rate method.

Financial liabilities are derecognised when the liability is extinguished (i.e. when the contractual obligation is discharged, cancelled or expires).

iii. Offsetting

Financial assets and liabilities are offset and the net amount reported in the statement of financial position 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.

Taxation

Taxation expense for the year comprises current and deferred tax recognised in the reporting period. 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. In this case tax is also recognised in other comprehensive income or directly in equity respectively.

Current or deferred taxation assets and liabilities are not discounted.

i. Current tax

Current tax is 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 statement of financial position date.

Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

ii. Deferred tax

Deferred tax arises from timing differences that are differences between taxable profits and total comprehensive income as stated in the financial statements. These 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 recognised in respect of all timing differences that have originated but not reversed at the statement of financial position 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.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair value of liabilities acquired and the amount that will be assessed for tax.

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.

Employee benefits

The Company provides a range of benefits to employees, including paid holiday arrangements and defined contribution pension plans.

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 company operates a defined contribution pension scheme for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid, the Company has no further payment obligations. Contributions payable to the company's pension scheme are charged to the Income Statement in the period to which they relate. Amounts not paid are shown in other creditors as a liability in the statement of financial position. The assets of the plan are held separately from the Company in independently administered funds.

Distributions to equity holders

Dividends and other distributions to the Company's shareholders are recognised as a liability in the financial statements in the period in which they are approved by the Company's shareholders. These amounts are recognised in retained earnings.

3.	CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Preparation of the financial statements required management to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made include:

Impairment of financial assets

At the end of each reporting period, an assessment is made as to whether there is objective evidence of impairment of any financial assets that are measured at cost or amortised cost, including trade debtors and amounts recoverable on contracts. If there is objective evidence of impairment, an impairment loss is recognised in the Income Statement immediately.

4.

TURNOVER

The turnover and profit before taxation were derived solely from continuing operations in the United Kingdom and are attributable to the principal activities of the Company.

5.	EMPLOYEES AND DIRECTORS

2021

2020

£

£

Wages and salaries

1,147,597

1,165,459

Social security costs

143,125

131,143

Other pension costs

55,489

53,401

1,346,211

1,350,003

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

2021

2020

Direct labour

6

4

Administration and management

15

15

21

19

6.	DIRECTORS' EMOLUMENTS

2021

2020

£

£

Directors' remuneration

156,737

-

7.	PROFIT BEFORE TAXATION

The profit is stated after charging/(crediting):

2021

2020

£

£

Depreciation - owned assets

217,133

118,370

(Profit)/loss on disposal of fixed assets

(33,481

)

48

8.	AUDITORS' REMUNERATION

2021

2020

£

£

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

9,000

3,800

Taxation compliance services

2,750

1,200

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

381,589

215,199

Deferred tax

-

16,500

Tax on profit

381,589

231,699

UK corporation tax has been charged at 19% (2020 - 19%).

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

2,082,758

1,229,830

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

395,724

233,668

Effects of:

Expenses not deductible for tax purposes

33

200

Adjustments to tax charge in respect of previous periods

100

-

Remeasurement of deferred tax for changes in tax rates

2,884

-

Other differences leading to an increase/(decrease) in taxation

(17,152

)

(2,169

)

Total tax charge

381,589

231,699

In March 2020, the Finance Bill 2020 was substantively enacted which maintained the corporation tax rate at 19% and in May 2021 the rate was increased to 25% in the Finance Bill 2021, effective from April 2023. Deferred taxes at the balance sheet date have been measured using the enacted tax rate and reflected in these financial statements.

10.

DIVIDENDS

2021

2020

£

£

Ordinary shares of £1 each

Final

1,000,000

250,000

11.	TANGIBLE FIXED ASSETS

Plant and

Motor

machinery

vehicles

Totals

£

£

£

Cost

At 1 August 2020

976,631

498,315

1,474,946

Additions

406,870

809,264

1,216,134

Disposals

(116,400

)

(18,452

)

(134,852

)

At 31 July 2021

1,267,101

1,289,127

2,556,228

Depreciation

At 1 August 2020

879,508

241,091

1,120,599

Charge for year

75,103

142,030

217,133

Eliminated on disposal

(90,397

)

(18,452

)

(108,849

)

At 31 July 2021

864,214

364,669

1,228,883

Net book value

At 31 July 2021

402,887

924,458

1,327,345

At 31 July 2020

97,123

257,224

354,347

12.

STOCKS

2021

2020

£

£

Raw materials

510,456

744,127

Stocks are stated after provision for impairment of £nil (2020: £105,443), being the write-down of slow-moving and obsolete stock to their net realisable value.

13.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2021

2020

£

£

Trade debtors

3,402

2,132

Amounts owed by group undertakings

827,375

1,506,266

Amounts recoverable on contract

2,073,154

2,115,359

VAT

200

1,332

Deferred tax asset

5,100

5,100

Prepayments and accrued income

55,010

40,833

2,964,241

3,671,022

Amounts owed by group undertakings are interest free and repayable on demand.

Trade debtors are stated after provisions for impairment of of £Nil (2020: £250). Impairment losses reversed in the Statement of income and retained earnings Income Statementduring the year amounted to £12,837 (2020: £437 recognised).