Leabrand Limited - Limited company accounts 23.1

REGISTERED NUMBER: 05207282 (England and Wales)

STRATEGIC REPORT, DIRECTORS' REPORT AND

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31ST AUGUST 2022

FOR

LEABRAND LIMITED

Page

Company Information

1

Strategic Report

2

Directors' Report

4

Report of the Independent Auditors

6

Income Statement

10

Other Comprehensive Income

11

Statement of Financial Position

12

Statement of Changes in Equity

13

Notes to the Financial Statements

14

DIRECTORS:

Mrs P K Cheema

Commercial Solutions Limited

SECRETARY:

Ms M K Cheema

REGISTERED OFFICE:

New Marlborough House

90c Wrotham Road

Gravesend, Kent

DA11 0QQ

REGISTERED NUMBER:

05207282 (England and Wales)

INDEPENDENT AUDITORS:

Watergates Ltd (Statutory Auditor)

109 Coleman Road

Leicester

Leicestershire

LE5 4LE

The directors present their strategic report for the year ended 31st August 2022.

REVIEW OF BUSINESS

The Company turnover during the year decreased by 48.9% to £7.2m (2021: £14.1m), with gross profit decreasing to £3.3m (2021: £4.6m) and profit before tax decreasing to £1.6m (2021: £1.8m). The gross profit margin was 46.1% (2021: 32.6%).

Company EBITDA during the year was £1.6m (2021: £1.8m).

The Company has seen reduced activity during the year. This was expected due to a slow-down in projects which is expected to pick up again. The directors are committed to continual investment in future years to increase the Company's capacity to continue to deliver a high level of service to customers. The directors are focusing on developing relationships in order to achieve the highest customer satisfaction. The directors believe that the continued commitment to invest in improving its service and to further understand customer's requirements will enable them to exceed customers' expectations and further grow and develop the business over the coming years.

PRINCIPAL RISKS AND UNCERTAINTIES

The directors consider the key risks to the business through a framework of policies, procedures and internal controls. All policies are subject to board approval and ongoing review by management. Compliance with regulations, legal and ethical standards is a high priority for the Company and the finance department takes on an important oversight role in this regard, to ensure that a proper internal control framework exists to manage financial risks and that the controls operate effectively.

Financial Risk

The principal financial risk faced is associated with the Company's ability to accurately estimate the costs of carrying out the contracts in which it engages, the ability to recover costs under the payment terms of all contracts, and the financial standing of clients in terms of their ability to discharge their obligations to the company.

The Company foresees a increases in the cost of rail welding supplies due to increased cross border costs and inflation.

Interest rate risk

The Company finances its operations through retained profit. Management periodically reviews its funding structures to ensure an optimal structure is in place, bearing in mind the commercial needs of the wider group and relevant legislation.

Liquidity risk

The Company seeks to manage liquidity risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably.

Competitive Risk

The market is highly competitive with aggressive tendering and increasing costs, particularly in respect of workers' wages, which continues to require careful consideration during the tender process to ensure pricing is competitive whilst maintaining profitability.

Health and Safety

The Company endeavours to deliver its services with the highest regard to principles of health and safety, with the overall aim of attaining and maintaining a zero accident rate and promoting a safety culture that is based on communication throughout all levels of the organisation.

The Environment

The Company recognised the importance of minimising the impact on the environment and is committed to the identification of environmental aspects of its activities and services and minimising the environmental impact to its clients throughout their lifecycle.

Human Resources

The Company's employees are its most important resource. It is essential to the future success of the business that a skilled and motivated workforce is retained.

FINANCIAL KEY PERFORMANCE INDICATORS

Given the nature of the business, the directors have determined certain key performance indicators to help them to both understand and manage the growing customer base. These are monitored closely on at least a monthly basis and the Company will continue to monitor those measures that are key to ensuring that the Company remains profitable. The KPI's are regularly circulated to the key management team to ensure full visibility by those helping to drive the business forward.

Turnover and gross profit are seen as key performance indicators, as margins for these businesses need to be healthy due to significant staff costs and other overheads. EBITDA is also seen as a key performance indicator. These have been disclosed above.

FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES

The directors ensure wherever possible that the business objectives are aligned with risk management. The directors are responsible for maintaining sound systems of internal control that provide reasonable assurance that the Company will not be hindered in achieving its business objectives by circumstances that are not foreseen.

No major risks have been identified other than those relating to the uncertainties and challenges set out above. In this respect, the directors have built up a strong team of staff with whom they work closely on a regular basis to ensure these risks are mitigated effectively.

FUTURE DEVELOPMENTS

Management will continue to seek opportunities to maximise turnover and profitability.

ON BEHALF OF THE BOARD:

Mrs P K Cheema - Director

24th August 2023

The directors present their report with the financial statements of the Company for the year ended 31st August 2022.

PRINCIPAL ACTIVITY

The principal activity of the Company in the year under review was that of labour supply to the construction and rail industries.

DIVIDENDS

No interim dividend was paid during the year. The directors recommend a final dividend of £2,000,000 per share.

The total distribution of dividends for the year ended 31st August 2022 will be £ 2,000,000 .

FUTURE DEVELOPMENTS

The director's assessment of future developments have been presented in the Strategic report.

DIRECTORS

The directors shown below have held office during the whole of the period from 1st September 2021 to the date of this report.

Mrs P K Cheema

Commercial Solutions Limited

GOING CONCERN

The director continues to adopt the going concern basis in preparing the financial statements. Their assessment of going concern is presented in note 2.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), 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 she ought to have taken as a director in order to make herself aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

AUDITORS

The auditors, Watergates Ltd (Statutory Auditor), will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mrs P K Cheema - Director

24th August 2023

Opinion

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

In our opinion the financial statements:

-	give a true and fair view of the state of the Company's affairs as at 31st August 2022 and of its profit for the year then ended;

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

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

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

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

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

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

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

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of directors

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

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

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

The extent to which the audit was considered capable of detecting irregularities including fraud

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

- we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the sector, we also considered the nature of the company's industry and it's control environment;

- we focused on laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006 and taxation legislation; as well as laws and regulations which do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or avoid a material penalty. These included GDPR and health & safety legislation;

- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

- identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

- considering and testing of the key internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations, as well as substantive procedures.

To address the risk of fraud through management bias and override of controls, we performed analytical procedures to identify any unusual or unexpected relationships; tested journal entries to identify unusual transactions; assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

- agreeing financial statement disclosures to underlying supporting documentation;

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

- reading the minutes of meetings of those charged with governance;

- enquiring of management as to actual and potential litigation and claims; and

- reviewing correspondence with HMRC, relevant regulators and the company's legal advisors.

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.

Nazir Malida FCCA (Senior Statutory Auditor)

for and on behalf of Watergates Ltd (Statutory Auditor)

109 Coleman Road

Leicester

Leicestershire

LE5 4LE

24th August 2023

TURNOVER

4

7,222,559

14,142,770

Cost of sales

(3,894,719

)

(9,527,085

)

GROSS PROFIT

3,327,840

4,615,685

Administrative expenses

(1,742,509

)

(2,837,816

)

1,585,331

1,777,869

Other operating income

14,716

9,604

OPERATING PROFIT

6

1,600,047

1,787,473

Interest receivable and similar income

6,865

459

1,606,912

1,787,932

Interest payable and similar expenses

7

(14

)

-

PROFIT BEFORE TAXATION

1,606,898

1,787,932

Tax on profit

8

(11,795

)

(340,885

)

PROFIT FOR THE FINANCIAL YEAR

1,595,103

1,447,047

PROFIT FOR THE YEAR

1,595,103

1,447,047

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,595,103

1,447,047

FIXED ASSETS

Tangible assets

10

11,636

10,366

CURRENT ASSETS

Debtors

11

4,085,954

4,328,930

Cash at bank and in hand

914,012

2,042,793

4,999,966

6,371,723

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

12

(1,497,839

)

(2,464,369

)

NET CURRENT ASSETS

3,502,127

3,907,354

TOTAL ASSETS LESS CURRENT LIABILITIES

3,513,763

3,917,720

PROVISIONS FOR LIABILITIES

13

(2,909

)

(1,969

)

NET ASSETS

3,510,854

3,915,751

CAPITAL AND RESERVES

Called up share capital

14

1

1

Retained earnings

15

3,510,853

3,915,750

SHAREHOLDERS' FUNDS

3,510,854

3,915,751

The financial statements were approved by the Board of Directors and authorised for issue on 24th August 2023 and were signed on its behalf by:

Mrs P K Cheema - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1st September 2020

1

2,468,703

2,468,704

Changes in equity

Total comprehensive income

-

1,447,047

1,447,047

Balance at 31st August 2021

1

3,915,750

3,915,751

Changes in equity

Dividends

-

(2,000,000

)

(2,000,000

)

Total comprehensive income

-

1,595,103

1,595,103

Balance at 31st August 2022

1

3,510,853

3,510,854

1.	STATUTORY INFORMATION

Leabrand 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.	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.

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.

This information is included in the consolidated financial statements of which this Company is a subsidiary. These financial statements may be obtained from New Marlborough House, 90c Wrotham Road, Gravesend, DA11 0QQ.

GOING CONCERN

The Company uses liquid resources and working capital balances that arise directly from its operations. The Company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs. Liquidity is monitored regularly by reference to forecasts and available facilities.

The business is financed through cash generated from operating activities. Cash on the balance sheet is £914,012 (2021: £2,042,793) at 31 August 2022.

The Company has significant debtor balances owed by related party Companies. No provision is reflected in this financial statement for any potential loss that may arise from the non-payment of any balance shown as due from related parties.

The directors have reviewed future projections, which they feel adequately reflect the current uncertain economic environment. After considering all relevant uncertainties, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

TURNOVER

Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes.

Turnover from the rendering of services in the form of engineers and other labour related activities is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs. Turnover is only recognised to the extent of recoverable expenses when the outcome of a contract cannot be estimated reliably.

TANGIBLE FIXED ASSETS

Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. Such cost includes costs directly attributable to making the asset capable of operating as intended.

Depreciation is provided on all tangible fixed assets, at rates calculated to write off the cost, less estimated residual value, of each asset on a systematic basis over its expected useful life as follows:

Plant and machinery - 25% on cost

Fixtures and fittings - 25% on cost

The carrying values of tangible fixed assets are reviewed annually for impairment in periods if events or changes in circumstances indicate the carrying value may not be recoverable.

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

IMPAIRMENT OF ASSETS

At each reporting date fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or loss.

If an impairment loss subsequently reverses, the carry amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an 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 loans to related parties.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.

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 statement of comprehensive income.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.

Financial assets and liabilities are offset and the net amount reported in the Balance sheet 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 for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

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

DEFERRED TAX

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

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

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

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.

3.	CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Company's accounting policies, which are described in note 2, 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. Actual results may differ from these estimates.

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

Critical judgements in applying the Company's accounting policies

The directors conclude that there are no critical judgements in applying the Company's accounting policies.

Key source of estimation uncertainty - provision for debtors

The recoverability of the related party debts have been assessed on the basis of forecasted cash flows expected from the related parties for all periods in place and committed to upon signing of the financial statements for the year ended 31 August 2022. This assessment has estimated that the entities are expected to be profitable and there will be sufficient cash to cover all related party loans.

Determining whether debtor balances are recoverable requires estimations based on up to date trading information. The directors use their knowledge of the business, the trading environment and future projections to assess whether provision is necessary in these areas.

4.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the Company and belong to one geographical market, being the United Kingdom.

5.	EMPLOYEES AND DIRECTORS

31/8/22

31/8/21

£

£

Wages and salaries

3,721,024

8,896,485

Social security costs

186,195

191,814

Other pension costs

21,338

24,351

3,928,557

9,112,650

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

31/8/22

31/8/21

Skilled workers

33

38

Management staff

8

6

41

44

31/8/22

31/8/21

£

£

Directors' remuneration

-

-

Director is remunerated within a separate entity outside of this Company.

6.	OPERATING PROFIT

The operating profit is stated after charging:

31/8/22

31/8/21

£

£

Depreciation - owned assets

4,767

4,215

Auditors' remuneration

14,000

14,000

7.

INTEREST PAYABLE AND SIMILAR EXPENSES

31/8/22

31/8/21

£

£

Interest on other loans

14

-

8.

TAXATION

Analysis of the tax charge

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

31/8/22

31/8/21

£

£

Current tax:

UK corporation tax

10,855

341,248

Deferred tax

940

(363

)

Tax on profit

11,795

340,885

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:

31/8/22

31/8/21

£

£

Profit before tax

1,606,898

1,787,932

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2021 - 19%)

305,311

339,707

Effects of:

Expenses not deductible for tax purposes

1,974

2,032

Capital allowances in excess of depreciation

(1,491

)

(491

)

Deferred tax

940

(363

)

Group relief

(294,939

)

-

Total tax charge

11,795

340,885

Factors that may affect future tax charges

Finance Bill 2021 included provisions to increase the main rate of corporation tax up to 25% from 1 April 2022, based on profitability. As this has been enacted by the balance sheet date, balances as at 31 August 2022 have been measured at 25%. The amended tax rate cause an increase in the deferred tax liability.

9.

DIVIDENDS

31/8/22

31/8/21

£

£

Ordinary share of £1

Final

2,000,000

-

10.	TANGIBLE FIXED ASSETS

Fixtures

Plant and

and

machinery

fittings

Totals

£

£

£

COST

At 1st September 2021

18,220

5,746

23,966

Additions

3,200

2,837

6,037

At 31st August 2022

21,420

8,583

30,003

DEPRECIATION

At 1st September 2021

7,854

5,746

13,600

Charge for year

4,767

-

4,767

At 31st August 2022

12,621

5,746

18,367

NET BOOK VALUE

At 31st August 2022

8,799

2,837

11,636

At 31st August 2021

10,366

-

10,366

11.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31/8/22

31/8/21

£

£

Trade debtors

18,175

433,116

Amounts owed by group undertakings

45,180

45,180

Other related parties

1,896,206

1,812,332

Prepayments and accrued income

2,126,393

2,038,302

4,085,954

4,328,930

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

12.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31/8/22

31/8/21

£

£

Trade creditors

100,683

91,098

Amounts owed to group undertakings

950,615

1,752,615

Corporation tax

10,855

341,248

Social security and other taxes

19,692

53,240

VAT

335,880

117,187

Other creditors

17,392

16,188

Accruals and deferred income

62,722

92,793

1,497,839

2,464,369

Amounts owed to group undertakings are unsecured, interest free, and repayable on demand.