Morgan Cargo Limited - Limited company accounts 22.3

REGISTERED NUMBER: 03824884 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements

for the Period 1 March 2022 to 31 December 2022

for

Morgan Cargo Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Statement of Comprehensive Income

9

Statement of Financial Position

10

Statement of Changes in Equity

11

Statement of Cash Flows

12

Notes to the Statement of Cash Flows

13

Notes to the Financial Statements

14

DIRECTORS:

J Morgan

H L Bosman

S W N Bruwer

A G De Clerk

REGISTERED OFFICE:

Chancery House

30 St Johns Road

Woking

Surrey

GU21 7SA

REGISTERED NUMBER:

03824884 (England and Wales)

AUDITORS:

The Barnbrook Sinclair Partnership LLP

Chartered Accountants

Statutory Auditor

Chancery House

30 St Johns Road

Woking

Surrey

GU21 7SA

The directors present their strategic report for the period 1 March 2022 to 31 December 2022.

REVIEW OF BUSINESS

The company aims to present a review of its development and performance during the period under review and its position at the year end. This review is consistent with the size and nature of the company and is written in the context of the risks and uncertainties it faces.

The company's trading during the ten month period to 31 December 2022 was a period which saw continued cost pressures with increases in freight charges and overheads in line with worldwide increases in inflation and the cost of living in general. The company was able to pass on some of these additional charges in line with industry practice which enabled it to maintain results consistent with the period period and in line with managements expectations,

The company considers its key performance indicators to be turnover, profit before taxation, net assets and cash.

The turnover reported in these financial statements for the ten months to 31 December 2022 decreased to £15,586,842 from £19,123,255 as shown in the twelve months to 28 February 2022. This represented a 0.9% increase in like for like sales comparing the same period from March to December 2021. The previous year to 28 February 2022 had seen a 19.2% increase in the previous period largely due to the effects of Covid on the company's February 2021 results.

The company continued to maintain its tight control over its costs and overheads contributing to the company showing a profit before tax of £820,310 (Feb 2022: £1,034,158).

The company's cash flow position increased strongly during the year and the company continues to hold considerable liquid resources without external borrowing allowing it to declare a substantial dividend in December 2022. The company's cash and bank balances at 31 December 2022 were £4,285,923 (Feb 22: £3,110,785) and its net assets as at 31 December 2022 were £1,481,926 (Feb 2022: £4,970,514). The strategic objective of the company continues to be the continuing growth of sales while maintaining strong control over its cost base.

The company anticipates continued growth in freight worldwide and believes its outlook remains positive and that it is well placed to benefit from its ongoing investment in people, premises and technology, together with its strong management team and diverse customer and supplier base utilising the well-established controls and systems in place to minimise the risks detailed below.

PRINCIPAL RISKS AND UNCERTAINTIES

The company's principal financial instruments comprise bank balances, trade debtors and trade creditors. The main purpose of these instruments is to provide funds for the company's operations. Their existence exposes the company to a number of financial risks, which have been considered and are managed as follows:

Credit risk:

The company has a significant and diverse customer base, ranging from large companies to individual operations and undertakes stringent credit checks and closely monitors the credit limits of existing customers by reference to current financial information and credit reference agency information all of which minimises credit risk.

Operational risk:

Operational risk is the risk of a direct or indirect loss resulting from the inadequacies or failures of processes or controls due to technology, staff, organisation or external factors. To monitor and control operational risk, the company maintains a system of comprehensive policies and a control framework which is designed to provide a sound and well-controlled operational environment.

Liquidity risk:

Liquidity risk is the risk that the company will have insufficient resources to meet its financial liabilities as they fall due. The company's strategy to managing liquidity risk is to control its cash flow by careful management of its working capital. The directors monitor this on a daily basis to maintain the company's cash flow and manage the timing of supplier payments.

Price risk:

Price risk is the risk that financial performance of the company will be adversely affected by pricing changes or price pressure from competitors. The company has managed this risk by securing pricing agreements with its key suppliers that sets out defined parameters and pricing. The company also ensures that its pricing is competitive and that it maintains a close relationship with key customers and suppliers throughout the year.

Interest rate risk:

Interest rate risk is the risk that the financial performance of the company will be adversely affected by adverse fluctuations on interest rates being charged to the company on its financial instruments. Due to the nature of the company's liabilities, there is very limited exposure to interest rate risk.

Currency risk:

Currency risk is the risk that the financial performance of the group will be adversely affected by fluctuations in foreign currencies used by the company. The company manages its exposure to currency risk by limiting the number of foreign currencies in use and by covering currencies where the risk is seen as significant.

The directors review the principal risks and uncertainties facing the group on a regular basis and ensure systems and policies are continuously updated to reflect any changes, they work in an efficient manner to minimise those risks and help achieve the company's objectives.

GOING CONCERN

The company's business activities, together with the factors likely to affect its future development, performance and position are set out above.

The financial statements have been prepared on the going concern basis. This basis assumes that sufficient funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent liabilities and commitments will occur in the ordinary course of business. All events subsequent to the date of the financial statements and for which the applicable financial reporting framework require adjustment or disclosure have been adjusted or disclosed.

The company's cashflows and performance have met the company's expectations as at the date of signing these financial statements. After making enquiries, the directors have an expectation that the company's net assets as at 31 December 2022 and projections for a period of twelve months from the accounts signing date are more than sufficient to provide adequate resources to continue in operational existence for the foreseeable future. The directors have therefore concluded that it is appropriate to prepare the financial statements on a going concern basis.

ON BEHALF OF THE BOARD:

H L Bosman - Director

28 February 2023

The directors present their report with the financial statements of the company for the period 1 March 2022 to 31 December 2022.

CHANGE OF ACCOUNTING REFERENCE DATE AND COMPARATIVE FIGURES

During the period under the review, the company changed its accounting reference date from 28 February to 31 December. Accordingly, these financial statements have been prepared for the ten month period ending 31 December 2022. The comparative figures shown are for the twelve month period ending 28 February 2022.

PRINCIPAL ACTIVITY

The principal activity of the company in the period under review was that of the international transport of goods.

DIVIDENDS

An interim dividend of £2,250 per share was paid on 2 March 2022. A second interim dividend of £18,500 per share was paid on 31 December 2022. The directors recommend that no final dividend be paid. The total distribution of dividends for the period ended 31 December 2022 will be £4,150,000.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 March 2022 to the date of this report.

J Morgan

H L Bosman

S W N Bruwer

A G De Clerk

FUTURE DEVELOPMENTS AND FINANCIAL RISK MANAGEMENT

This information is disclosed in the Strategic Report in accordance with Section 414C (11) of the Companies Act 2006.

DISABLED EMPLOYEES

The company operates an equal opportunities policy with regard to recruitment and seeks to offer suitable work and training wherever practicable to persons with disabilities. The policy of the company is to ensure that disabled applicants for employment are given full and fair consideration having regard to their particular aptitudes and abilities. Existing disabled employees are given equal access to appropriate training, career development and promotion opportunities within the company. In the event of employees becoming disabled while in the employment of the company, all reasonable means are explored to achieve retention in employment in the same or an alternative capacity.

ENGAGEMENT WITH EMPLOYEES

The company aims to promote a working environment free from unlawful harassment, victimisation, bullying and discrimination and regards all of its employees as members of a team where opinions are valued and everyone is regarded as equal in status and treated with fairness and respect.

The company operates a diversity policy to ensure that no job applicant or existing employee is treated less favourably on the grounds of their gender, age, marital status, disability, race, colour, sexual orientation, nationality, ethnic origin, religion or belief and that nobody is disadvantaged by conditions, requirements or practices which cannot be shown to be just and fair. The way the company recruits and works is intended to ensure that employees are selected, promoted and treated according to their ability and that everyone has an equal opportunity to receive training and development.

The company communicates regularly with all employees on matters relating to its performance. Employees are encouraged to contribute to the decision-making process through meetings held by the management of the company to discuss matters of concern. In addition, there is a bulletin board at company premises where memoranda relating to company policy are displayed. Regular meetings are held by the management of the company to discuss matters of concern. An open management policy is operated whereby all members of staff (including part-time and casual staff) are briefed regularly and kept informed on matters affecting the company by means of meetings and communications, together with personal appraisals and feedback sessions.

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 ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, The Barnbrook Sinclair Partnership LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.

ON BEHALF OF THE BOARD:

H L Bosman - Director

28 February 2023

Opinion

We have audited the financial statements of Morgan Cargo Limited (the 'company') for the period ended 31 December 2022 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Statement of Cash Flows, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its profit for the period then ended;

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

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

Basis for opinion

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

Conclusions relating to going concern

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 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We obtained an understanding of the legal and regulatory framework that the company operates in, focussing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context include the Companies Act and tax legislation. In addition we considered the provisions of other laws and regulations that do not have an effect on the financial statements but compliance with which may be fundamental to the company's ability to incur or to avoid a material penalty, including the company's operating licences and environmental regulations.

Our procedures in response to the risks identified included reviewing the financial statements disclosures and testing supporting documentation to assess compliance with the provisions of relevant laws and regulations considered to have a direct effect in the financial statements, enquiring of management concerning actual or potential litigation and claims, performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud, reading minutes of meetings of those charged with governance, reviewing correspondence with relevant regulatory authorities and in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments, assessing whether the judgements made in making accounting estimates are indicative of a potential bias and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

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

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.

Stuart Wright (Senior Statutory Auditor)

for and on behalf of The Barnbrook Sinclair Partnership LLP

Chartered Accountants

Statutory Auditor

Chancery House

30 St Johns Road

Woking

Surrey

GU21 7SA

28 February 2023

REVENUE

4

15,586,842

19,123,255

Cost of sales

(13,560,933

)

(16,589,347

)

GROSS PROFIT

2,025,909

2,533,908

Administrative expenses

(1,256,059

)

(1,539,723

)

769,850

994,185

Other operating income

-

7,988

OPERATING PROFIT

6

769,850

1,002,173

Interest receivable and similar income

7

50,460

31,985

PROFIT BEFORE TAXATION

820,310

1,034,158

Tax on profit

8

(158,898

)

(193,536

)

PROFIT FOR THE FINANCIAL PERIOD

661,412

840,622

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

661,412

840,622

FIXED ASSETS

Property, plant and equipment

10

60,526

86,558

CURRENT ASSETS

Debtors

11

3,463,108

4,486,340

Cash at bank and in hand

4,285,923

3,110,785

7,749,031

7,597,125

CREDITORS

Amounts falling due within one year

12

(6,314,305

)

(2,698,168

)

NET CURRENT ASSETS

1,434,726

4,898,957

TOTAL ASSETS LESS CURRENT LIABILITIES

1,495,252

4,985,515

PROVISIONS FOR LIABILITIES

14

(13,326

)

(15,001

)

NET ASSETS

1,481,926

4,970,514

CAPITAL AND RESERVES

Called up share capital

15

100

100

Retained earnings

16

1,481,826

4,970,414

SHAREHOLDERS' FUNDS

1,481,926

4,970,514

The financial statements were approved by the Board of Directors and authorised for issue on 28 February 2023 and were signed on its behalf by:

H L Bosman - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 March 2021

100

4,279,792

4,279,892

Changes in equity

Dividends

-

(150,000

)

(150,000

)

Total comprehensive income

-

840,622

840,622

Balance at 28 February 2022

100

4,970,414

4,970,514

Changes in equity

Dividends

-

(4,150,000

)

(4,150,000

)

Total comprehensive income

-

661,412

661,412

Balance at 31 December 2022

100

1,481,826

1,481,926

Cash flows from operating activities

Cash generated from operations

1

1,722,043

1,487,920

Tax paid

(201,880

)

(236,563

)

Net cash from operating activities

1,520,163

1,251,357

Cash flows from investing activities

Purchase of tangible fixed assets

(2,794

)

-

Sale of tangible fixed assets

6,000

-

Interest received

50,460

31,985

Net cash from investing activities

53,666

31,985

Cash flows from financing activities

New loans in year

3,700,000

-

Loan repayments in year

51,309

84,177

Equity dividends paid

(4,150,000

)

(150,000

)

Net cash from financing activities

(398,691

)

(65,823

)

Increase in cash and cash equivalents

1,175,138

1,217,519

Cash and cash equivalents at beginning of period

2

3,110,785

1,893,266

Cash and cash equivalents at end of period

2

4,285,923

3,110,785

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

Period

1/3/22

to

Year ended

31/12/22

28/2/22

£

£

Profit before taxation

820,310

1,034,158

Depreciation charges

22,021

44,049

Loss on disposal of fixed assets

805

-

Finance income

(50,460

)

(31,985

)

792,676

1,046,222

Decrease in trade and other debtors

973,649

235,327

(Decrease)/increase in trade and other creditors

(44,282

)

206,371

Cash generated from operations

1,722,043

1,487,920

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Period ended 31 December 2022

31/12/22

1/3/22

£

£

Cash and cash equivalents

4,285,923

3,110,785

Year ended 28 February 2022

28/2/22

1/3/21

£

£

Cash and cash equivalents

3,110,785

1,893,266

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1/3/22

Cash flow

At 31/12/22

£

£

£

Net cash

Cash at bank and in hand

3,110,785

1,175,138

4,285,923

3,110,785

1,175,138

4,285,923

Total

3,110,785

1,175,138

4,285,923

1.	STATUTORY INFORMATION

Morgan Cargo 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.

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

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.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised. Any revision only affects that period or in the period of the revision and future periods if the revision affects both current and future periods.

The company makes estimates and assumptions concerning the future. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results. The judgements made by the directors in the process of applying the company's accounting policies that have the most significant effect on the amounts recognised in the financial statements include:

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, asset 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.

Debtors - The age, nature, and recoverability of all debtors are reviewed regularly by management and provisions made where appropriate.

Supplier arrangements - Management review commercial arrangements with suppliers on a regular basis, with the company recognising discounts and rebates in the period in which economic and legal benefit transfers.

Consistent procedures and management tools are in place to ensure that estimates are applied and results determined on a consistent basis. The directors do not consider that there are any other accounting estimates or areas of judgement used in the preparation of these financial statements that are critical to the company's circumstances.

Revenue

Revenue is recognised at the fair value of the consideration received or receivable for sale of goods and services to external customers in the ordinary nature of the business. Revenue is recognised when it and the associated costs can be reliably measured, future economic benefits are probable, and the risks and rewards of ownership have been transferred to the customer. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates. Revenue is stated net of Value Added Tax.

Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Depreciation is provided on all tangible fixed assets at rates calculated to write each asset down to its estimate residual value on a straight line basis over its expected useful life, as follows:-

Computer equipment

- 33% on cost

Fixtures and fittings

- 20% on cost and 33% on cost

Motor vehicles

- 25% on reducing balance

Office equipment

- 33% on cost

Residual value is calculated on prices prevailing at the reporting date, after estimated costs of disposal, for the asset as if it were at the age and in the condition expected at the end of its useful life.

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset and is recognised in the profit and loss account.

Impairment of fixed assets

Fixed assets are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable or as otherwise required by relevant accounting standards.

Shortfalls between the carrying value of fixed assets and their recoverable amounts, being the higher of net realisable value and value-in-use, are recognised as impairments. Impairment losses are recognised in the profit and loss account.

Financial instruments

The company has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS102, in full, to all of its financial instruments.

Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Financial assets and financial liabilities are recognised when the company becomes a party to the contractual provisions of the instrument and are offset only when the company currently has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Financial assets

Debtors

Debtors which are receivable within one year and which do not constitute a financing transaction are initially measured at the transaction price. Debtors are subsequently measured at amortised cost, being the transaction price less any amounts settled and any impairment losses.

Where an arrangement with a debtor constitutes a financing transaction, the debtor is initially and subsequently measured at the present value of future payments discounted at a market rate of interest for a similar debt instrument.

A provision for impairment of debtors is established when there is evidence that the amounts due will not be collected according to the original terms of the contract. Impairment losses are recognised in profit or loss for the excess of the carrying value of the debtor over the present value of the future cash flows discounted using the original effective interest rate. Subsequent reversals of an impairment loss that objectively relate to an event accruing after the impairment loss was recognised, are recognised immediately in profit or loss.

Financial liabilities and equity

Financial instruments are classified as liabilities and equity instruments 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 company after deducting all of its liabilities.

Equity instruments

Financial instruments classified as equity instruments are recorded at the fair value of the cash or other resources received or receivable, net of direct costs of issuing the equity instruments.

Creditors

Creditors which are payable within one year and which do not constitute a financing transaction are initially measured at the transaction price and subsequently measured at amortised cost, being the transaction price less any amounts settled.

Borrowings

Borrowings are initially recognised at the transaction price, including transaction costs, and subsequently measured at amortised cost using the effective interest method. Interest expense is recognised on the basis of the effective interest method and is included in interest payable and other similar charges.

Derecognition of financial assets and liabilities

A financial asset is derecognised only when the contractual rights to cash flows expire or are settled, or substantially all the risks and rewards of ownership are transferred to another party, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party. A financial liability (or part thereof) is derecognised when the obligation specified in the contract is discharged, cancelled or expires.

Taxation

Taxation for the period 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 statement of financial position date.

The company is part of a tax group for certain aspects of tax legislation. One of these aspects relates to group relief whereby current tax liabilities can be offset by current tax losses arising in other companies within the same tax group. Payment for group relief is made equal to the tax benefit with amounts included within the current tax disclosures.

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 period 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.

Foreign currencies

Transactions in currencies other than the functional currency (foreign currencies) are initially recorded at the exchange rate prevailing on the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies are translated at the rate ruling at the date of the transaction or, if the asset or liability is measure at fair value, the rate when that fair value was determined.

All translation differences are taken to profit or loss, except to the extent that they relate to gains or losses on non-monetary items recognised in other comprehensive income, when the related translation gain or loss is also recognised in other comprehensive income.

Pension costs and other post-retirement benefits

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

For defined contribution schemes the amount charged to the profit and loss account in respect of pension costs and other post retirement benefits is the contributions payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the balance sheet.

Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense in the period in which

these are incurred. The holiday year for the company ends at the end of the calendar year and employees are not entitled to carry forward unused holiday.

Dividends

Dividends are recognised as liabilities once they are no longer at the discretion of the company.

4.

REVENUE

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

The analysis of turnover by geographical market required by paragraph 68 of schedule 1 of the Companies Act 2006 has not been provided as, in the opinion of the directors, such disclosure would be seriously prejudicial to the interests of the company.

5.	EMPLOYEES AND DIRECTORS

Period

1/3/22

to

Year ended

31/12/22

28/2/22

£

£

Wages and salaries

1,642,583

1,547,623

Social security costs

163,522

148,573

Other pension costs

31,778

28,678

1,837,883

1,724,874

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

Period

1/3/22

to

Year ended

31/12/22

28/2/22

Management and administration

7

8

Operations

52

41

59

49

Period

1/3/22

to

Year ended

31/12/22

28/2/22

£

£

Directors' remuneration

55,650

64,804

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

Money purchase schemes

1

1

The company operates a contributory money purchase pension scheme. The company's liability under this scheme is limited to its regular contributions paid on behalf of each member.

6.	OPERATING PROFIT

The operating profit is stated after charging:

Period

1/3/22

to

Year ended

31/12/22

28/2/22

£

£

Depreciation - owned assets

22,021

44,049

Loss on disposal of fixed assets

805

-

Auditors' remuneration

25,000

9,000

Taxation compliance services

500

500

Other non- audit services

1,550

-

Operating lease rentals - land and buildings

281,252

339,740

7.

INTEREST RECEIVABLE AND SIMILAR INCOME

Period

1/3/22

to

Year ended

31/12/22

28/2/22

£

£

Interest receivable

50,460

31,985

During the period, the company received interest from group companies totalling £41,508 (Feb 2022: £31,060) and from bank balances and other sources totalling £8,952 (Feb 2022: £925).

8.

TAXATION

Analysis of the tax charge

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

Period

1/3/22

to

Year ended

31/12/22

28/2/22

£

£

Current tax:

UK corporation tax

160,573

202,931

Prior year over provision

-

(1,118

)

Total current tax

160,573

201,813

Deferred tax

(1,675

)

(8,277

)

Tax on profit

158,898

193,536

UK corporation tax has been charged at 19% (2022 - 19%).

Reconciliation of total tax charge included in profit and loss

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

Period

1/3/22

to

Year ended

31/12/22

28/2/22

£

£

Profit before tax

820,310

1,034,158

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2022 - 19%)

155,859

196,490

Effects of:

Expenses not deductible for tax purposes

-

83

Adjustments to tax charge in respect of previous periods

-

(1,118

)

Group loss relief

-

(1,919

)

Change in rate of tax for deferred tax liability

3,198

-

Super deduction capital allowances

(159

)

-

Total tax charge

158,898

193,536

The company is a close company within the meaning of the Income and Corporation Taxes Act 1988.

9.

DIVIDENDS

Period

1/3/22

to

Year ended

31/12/22

28/2/22

£

£

Ordinary shares of 50p each

Interim

4,150,000

150,000