Unique Window Systems Ltd - Limited company accounts 20.1

REGISTERED NUMBER: 05060094 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 30 April 2021

for

Unique Window Systems Ltd

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Statement of Comprehensive Income

10

Balance Sheet

11

Statement of Changes in Equity

12

Cash Flow Statement

13

Notes to the Cash Flow Statement

14

Notes to the Financial Statements

16

DIRECTORS:

S J Patel

A J Patel

J W Raven

D C Rowley

S J Birkin

N G Addison

REGISTERED OFFICE:

87 Parker Drive

Leicester

LE4 0JP

REGISTERED NUMBER:

05060094 (England and Wales)

AUDITORS:

Torr Waterfield Limited

Statutory Auditor

Park House

37 Clarence Street

Leicester

Leicestershire

LE1 3RW

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

REVIEW OF BUSINESS

Although the company's turnover for the year reduced from £26.1m to £22.2m, the directors are satisfied with the results for the year in what continues to be a very challenging and competitive environment. Under the prevailing conditions much credit is due to the management and staff throughout the company.

PRINCIPAL RISKS AND UNCERTAINTIES

The directors consider that the company has potential risks similar to those faced by other companies in the sector namely retaining loyalty of its customers, suppliers and staff. Considerable emphasis is devoted to maintaining service levels with customers and working closely with suppliers on quality and logistical issues to ensure that a high level of performance is achieved. The directors continually focus on medium and long term sustainable income generation and apply resources in developing and sourcing products to seek out additional profitable revenue streams.

Staff are encouraged to contribute fully to the business and are remunerated accordingly to mitigate this risk and encourage development.

The directors are keeping the impact and implications of the Coronavirus under constant review. They have been encouraged by the range of measures introduced by the UK government to support businesses such as ours during these challenging times. It remains our intention to continue to operate the business so it will be well-placed to take advantage of appropriate commercial opportunities in the foreseeable future.

FINANCIAL KEY PERFORMANCE INDICATORS

The directors consider the trading activity, specifically levels of turnover and gross profit as well as the net asset position of the company, to be the key performance indicators of the business. Turnover and net assets have shown a further improvement in the current year.

Gross profit percentage has reduced from last year, reflecting the company's increased investment in the recruitment of additional staff and the training of both new and existing employees.

Performance is measured on a monthly basis through detailed management accounts and reviews of forward order books and enquiries. The company also has in place a number of key performance indicators, managed through senior level performance objectives.

Revenue is a key measure, and this measure shows the success of the sales teams in terms of orders secured and business generated. In addition new areas for growth are explored through opening of new accounts and increasing volumes with existing customers.

Gross margin and profit percentage are important measures of performance and this is monitored to understand and control external trends in product pricing, manufacturing efficiency control and sourcing. Fixed overhead cost base is also monitored to ensure that value for money is achieved and profitability is not eroded unnecessarily.

Debtor and creditor days are monitored and close control is maintained to ensure that customer payments are received in line with agreed terms and suppliers are paid in line with contractual commitments. Cash flow and working capital is monitored as part of the monthly reporting and the company strives to be cash positive.

Investment in fixed assets is either financed through surplus working capital or specific asset funding in line with the overall working capital requirements.

ON BEHALF OF THE BOARD:

A J Patel - Director

12 January 2022

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 the manufacture and sale of windows and doors.

DIVIDENDS

Dividends of £87,400 (2020: £87,400) were paid during the year.

FUTURE DEVELOPMENTS

The company continues to increase its production capacity through rental of additional factory capacity and investment and rental of plant and machinery. This investment will enable further efficiencies to be made into the production process and enable the company to meet current and anticipated future demand. The directors consider that the company's market place will remain very competitive for the foreseeable future. The directors believe that with its quality product and strong management team, the company is well placed to take advantage of every opportunity in the current year.

DIRECTORS

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

S J Patel

A J Patel

J W Raven

D C Rowley

S J Birkin

N G Addison

FINANCIAL INSTRUMENTS

The company's financial risk management objective is broadly to seek to make neither profit nor loss on exposure to currency or interest rate risks. Its policy is to finance working capital through retained earnings and through borrowings using hire purchase and lease finance on capital expenditure at prevailing market rates.

The company is also exposed to the usual credit risk and cashflow risk associated with selling on credit and manages this through selling to credit worthy customers and strong credit control procedures.

The nature of its financial instruments means that they are not subject to significant price risk or liquidity risk and, accordingly, the directors do not consider any risks attaching to the use of financial instruments to be material to an ongoing assessment of its financial position or profit.

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). 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.

ON BEHALF OF THE BOARD:

A J Patel - Director

12 January 2022

Qualified Opinion

We have audited the financial statements of Unique Window Systems Ltd (the 'company') for the year ended 30 April 2021 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, 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, except for the possible effects of the matter described in the basis for qualified opinion section of our report, the financial statements:

- give a true and fair view of the state of the company's affairs as at 30 April 2020 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 qualified 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. We were not able to observe the counting of certain stock quantities held at one of the company's locations on 30 April 2020 due to limitations arising from the Coronavirus pandemic. We were unable to satisfy ourselves by alternative means concerning the existence and valuation of these stock quantities held at 30 April 2020, which are included in the comparative balance sheet at £785,000, by using other audit procedures.

Consequently we were unable to determine whether any adjustment to this amount at 30 April 2020 was necessary or whether there was any consequential effect on the cost of sales for the year ended 30 April 2020. In addition, were any adjustment to the stock balance to be required, the strategic report would also need to be amended.

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 these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified 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.

As described in the basis for qualified opinion section of our audit report, we were unable to satisfy ourselves concerning the stock quantities of £785,000 held at 30 April 2020. We have concluded that where the other information refers to the stock balance or related balances such as cost of sales, it may be materially misstated for the same reason.

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

Except for the matter described in the basis for qualified opinion section of our report, in 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.

Arising solely from the limitation on the scope of our work relating to stock, referred to above:

-

we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and

-

we were unable to determine whether adequate accounting records have been kept.

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:

-	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.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on pages four and five, 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.

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

The capability to detect irregularities is based on the auditor identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, and then designing and performing audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

a) Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, the following approach was taken:

-

Understanding the nature of the industry and sector, control environment and business performance;

-

Consideration of the results of our enquiries of management and those charged with governance about their own identification and assessment of the risks of irregularities;

-

Understanding the company's policies and procedures on compliance with laws and regulations and management of fraud risk, including documentation of instances of non-compliance of laws and regulations and instances of actual, suspected or alleged fraud;

-

Consideration of matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud;

-

Understanding the legal and regulatory frameworks that the company operates in through enquiry of management and those charged with governance and understanding the company's industry and sector. The key laws and regulations that were considered to have an effect on material amounts and disclosures in the financial statements included the Companies Act and tax legislation.

b) Audit response to risks identified

Based on this understanding, the following audit procedures were designed and performed to respond to the risks identified:

-

Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations described as having a direct effect on the financial statement;

-

Enquiring of management, those charged with governance and, where applicable, the company's solicitors concerning actual and potential litigation and claims;

-

Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

-

Reviewing minutes of meetings of those charged with governance and, where applicable, correspondence with regulators;

-

Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness and evaluating the business rationale of significant transactions outside the normal course of business;

-

Communication of potential fraud risks to all engagement team members and remaining alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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.

Peter Morris (Senior Statutory Auditor)

for and on behalf of Torr Waterfield Limited

Statutory Auditor

Park House

37 Clarence Street

Leicester

Leicestershire

LE1 3RW

28 January 2022

TURNOVER

22,113,084

26,141,246

Cost of sales

(17,992,438

)

(20,418,465

)

GROSS PROFIT

4,120,646

5,722,781

Distribution costs

(634,181

)

(829,711

)

Administrative expenses

(4,154,330

)

(4,242,476

)

(667,865

)

650,594

Other operating income

1,077,289

358,309

OPERATING PROFIT

4

409,424

1,008,903

Interest receivable and similar income

58

886

409,482

1,009,789

Interest payable and similar expenses

5

(116,519

)

(71,421

)

PROFIT BEFORE TAXATION

292,963

938,368

Tax on profit

6

(89,741

)

(46,629

)

PROFIT FOR THE FINANCIAL YEAR

203,222

891,739

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

203,222

891,739

FIXED ASSETS

Intangible assets

8

-

-

Tangible assets

9

3,909,602

4,123,689

Investments

10

28,653

28,653

3,938,255

4,152,342

CURRENT ASSETS

Stocks

11

3,198,306

3,009,335

Debtors

12

6,031,532

5,725,327

Cash at bank and in hand

2,091,979

691,961

11,321,817

9,426,623

CREDITORS

Amounts falling due within one year

13

(6,752,691

)

(5,228,271

)

NET CURRENT ASSETS

4,569,126

4,198,352

TOTAL ASSETS LESS CURRENT LIABILITIES

8,507,381

8,350,694

CREDITORS

Amounts falling due after more than one year

14

(1,221,446

)

(1,211,130

)

PROVISIONS FOR LIABILITIES

18

(277,125

)

(246,576

)

NET ASSETS

7,008,810

6,892,988

CAPITAL AND RESERVES

Called up share capital

19

1,000

1,000

Retained earnings

7,007,810

6,891,988

SHAREHOLDERS' FUNDS

7,008,810

6,892,988

The financial statements were approved by the Board of Directors and authorised for issue on 12 January 2022 and were signed on its behalf by:

S J Patel - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 May 2019

1,000

6,087,649

6,088,649

Changes in equity

Dividends

-

(87,400

)

(87,400

)

Total comprehensive income

-

891,739

891,739

Balance at 30 April 2020

1,000

6,891,988

6,892,988

Changes in equity

Dividends

-

(87,400

)

(87,400

)

Total comprehensive income

-

203,222

203,222

Balance at 30 April 2021

1,000

7,007,810

7,008,810

Cash flows from operating activities

Cash generated from operations

1

1,242,063

1,954,666

Interest paid

(55,204

)

(21,940

)

Interest element of hire purchase payments paid

(61,315

)

(49,481

)

Tax paid

63,164

46,897

Net cash from operating activities

1,188,708

1,930,142

Cash flows from investing activities

Purchase of tangible fixed assets

(656,673

)

(781,140

)

Sale of tangible fixed assets

142,039

55,939

Interest received

58

886

Net cash from investing activities

(514,576

)

(724,315

)

Cash flows from financing activities

New loans in year

940,000

-

Loan repayments in year

(19,278

)

(33,453

)

Capital repayments in year

(107,436

)

(287,319

)

Equity dividends paid

(87,400

)

(87,400

)

Net cash from financing activities

725,886

(408,172

)

Increase in cash and cash equivalents

1,400,018

797,655

Cash and cash equivalents at beginning of year

2

691,961

(105,694

)

Cash and cash equivalents at end of year

2

2,091,979

691,961

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

30.4.21

30.4.20

£

£

Profit before taxation

292,963

938,368

Depreciation charges

746,661

692,071

Profit on disposal of fixed assets

(18,037

)

(2,373

)

Finance costs

116,519

71,421

Finance income

(58

)

(886

)

1,138,048

1,698,601

(Increase)/decrease in stocks

(188,971

)

230,167

(Increase)/decrease in trade and other debtors

(369,369

)

2,112,270

Increase/(decrease) in trade and other creditors

662,355

(2,086,372

)

Cash generated from operations

1,242,063

1,954,666

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 30 April 2021

30.4.21

1.5.20

£

£

Cash and cash equivalents

2,091,979

691,961

Year ended 30 April 2020

30.4.20

1.5.19

£

£

Cash and cash equivalents

691,961

2,015

Bank overdrafts

-

(107,709

)

691,961

(105,694

)

3.	ANALYSIS OF CHANGES IN NET DEBT

Other

non-cash

At 1.5.20

Cash flow

changes

At 30.4.21

£

£

£

£

Net cash

Cash at bank

and in hand

691,961

1,400,018

2,091,979

691,961

1,400,018

2,091,979

Debt

Finance leases

(1,212,706

)

107,436

-

(1,105,270

)

Debts falling due

within 1 year

(34,593

)

(106,056

)

(650,050

)

(790,699

)

Debts falling due

after 1 year

(650,051

)

(814,666

)

650,050

(814,667

)

(1,897,350

)

(813,286

)

-

(2,710,636

)

Total

(1,205,389

)

586,732

-

(618,657

)

1.	STATUTORY INFORMATION

Unique Window Systems 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 (£).

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.

Critical accounting judgements and key sources of estimation uncertainty

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

In preparing these financial statements the directors have exercised their judgement to determine whether leases entered into by the company either as a lessor or a lessee are operating 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.

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

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 assets. The useful economic lives and residual values are reviewed annually. They are amended when necessary to reflect current accounting estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.

ii) Trade debtors

At each reporting date, trade debtors are assessed for recoverability. If there is any evidence of impairment, the carrying amount of the debtor is reduced to its recoverable amount. The impairment loss is recognised in the income statement.

iii) Stocks

In determining stock provisions, future demand and selling price is evaluated and appropriate provisions are made to reflect the risk of obsolescence and impairment in carrying value. The provisioning policy is in place to ensure that the carrying value of stock recognised in the financial statements is the lower of cost and estimated selling price less costs to complete and sell, in accordance with the stated accounting policy.

iv) Share based payment transactions

The directors are required to use an appropriate pricing model to value the issue of equity to employees or those providing similar services. Any charge to the profit and loss account is therefore a function of the chosen pricing model, which is based on a range of assumptions

Turnover

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

The company recognises turnover when the following criteria have been met:

i) Sale of goods

Revenue from the sale of goods is recognised when :

(a) the significant risks and rewards of ownership have been transferred to the buyer;

(b) the company retains no ongoing involvement or control over the goods;

(c) the revenue can be reliably measured;

(d) it is probable that the company will receive the consideration due under the transaction; and

(e) the costs incurred in respect of the transaction can be reliably measured.

ii) Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

(a) the amount of revenue can be reliably measured;

(b) it is probable that the company will receive the consideration due under the contract;

(c) the stage of completion of the contract at the end of the reporting period can be measured reliably; and

(d) the costs incurred and the costs to complete the contract can be reliably measured.

Tangible fixed assets

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.

Freehold property

-

2% on cost

Plant and machinery

-

10% on cost

Fixtures and fittings

-

10% - 20% on cost

Motor vehicles

-

25% on cost

Freehold land is not depreciated.

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in a manner intended by management.

The company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when the cost is incurred, if the replacement part is expected to provide incremental future benefits to the company, The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to the profit or loss during the period in which they are incurred.

Government grants

Government grants receivable in relation to expenditure is recognised when the expenditure is charged to the Statement of Comprehensive Income.

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

Financial instruments

The company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties and loans to related parties.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the profit and loss account.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, 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 balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Research and development

Expenditure on research and development is written off in the year in which it is incurred.

Foreign currencies

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.

Hire purchase and leasing commitments

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.

Pension costs and other post-retirement benefits

The company operates defined contribution pension schemes. Contributions payable to the company's pension schemes are charged to profit or loss in the period to which they relate.

3.	EMPLOYEES AND DIRECTORS

30.4.21

30.4.20

£

£

Wages and salaries

5,084,579

4,794,414

Social security costs

448,716

401,018

Other pension costs

98,590

137,566

5,631,885

5,332,998

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

30.4.21

30.4.20

Administration and directors

35

24

Sales and distribution

14

31

Production

177

175

226

230

30.4.21

30.4.20

£

£

Directors' remuneration

311,465

297,913

Directors' pension contributions to money purchase schemes

6,846

47,289

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

Money purchase schemes

6

6

Information regarding the highest paid director is as follows:

30.4.21

30.4.20

£

£

Emoluments etc

89,809

77,480

Pension contributions to money purchase schemes

1,314

1,316