Green Parts Salvage & Recycling Ltd - Limited company accounts 23.2

REGISTERED NUMBER: 03885240 (England and Wales)

Strategic Report,

Report of the Directors and

Financial Statements

FOR THE PERIOD

1 December 2022 to 31 July 2023

for

GREEN PARTS SALVAGE & RECYCLING LTD

Page

Company Information

1

Strategic Report

2

Report of the Directors

5

Report of the Independent Auditors

7

Statement of Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

11

Notes to the Financial Statements

12

Directors:

Mr I M Hill

Ms J Pocock

Mr S Powers

Ms L C Stearns

Mr P K Kirkpatrick

Mr K Duty

Mr P W Briggs

Registered office:

Acrey Fields

Woburn Road

Wootton

Bedfordshire

MK43 9EJ

Registered number:

03885240 (England and Wales)

Auditors:

NRB

1st Floor Waterside House

Waterside Drive

Wigan

Lancashire

WN3 5AZ

The directors present their strategic report for the period 1 December 2022 to 31 July 2023.

Review of business

The principal activity of the company in the period under review was that of the sale of motor salvage purchased from insurance companies. The company is actively involved in all stages of the recycling supply chain, including collection, dismantling and distribution. The company prides itself on being the UK's leading vehicle dismantling and recycling specialist and is committed to providing the highest quality standards within the recycled parts industry.

In July 2022, the entire share capital of the company's ultimate parent undertaking, Green Parts Specialist Holdings Ltd, was acquired by Copart UK Limited, which is part of an international group of companies headed by Copart Inc., a NASDAQ listed company incorporated in Delaware, USA. As a result of the acquisition, the directors consider Copart Inc, to be the company's ultimate parent undertaking and controlling party.

The results for the period show sales of £28,460,806 (2022- £53,690,051) and a pre-tax profit of £3,131,566 (2022 - £7,472,599). In line with expectations, as current reporting period is eight months compared with twelve months last year. Gross profit percentage is in line with last year and the directors are pleased with the results for the financial period and, together with the position of the company at the period end, consider that these demonstrate the strength of the company and the quality of its employees.

The company continues to advocate the financial and environmental benefits of green parts and has continued to see a strong demand for quality assured parts, as insurers continue to look for ways to save money whilst being environmentally responsible. The company ensures that it meets this demand by providing an excellent service and continues to invest in all aspects of the business.

The company continuously invests in its insurance portal as the directors see this as being important in helping clients to further streamline their systems and to strengthen relationships.

The directors are committed to the company meeting its environmental obligations. The company continues to meet its annual recycling targets and constantly strives to improve operations to become more energy efficient, prevent pollution and reduce waste where possible.

Health and safety considerations remain of paramount importance to the company and it has renewed its ISO accreditations. The directors are committed to the highest practical standards in health and safety management in order to provide a safe environment for employees and customers.

The directors recognise that the professionalism and expertise of its employees is crucial to the success of the business and enables the company to provide the highest standards of service.

Key performance indicators

The company considers its key performance indicators to be turnover, gross profit percentage, net profit before tax percentage and the number of employees. These are set out below :

2023

2022

2021

Turnover

£28,460,806

£53,690,051

£41,267,254

Gross profit percentage

27%

28%

29%

Net profit before tax percentage

11%

14%

13%

Number of employees

172

171

150

The directors are pleased with how the company has performed against these key indicators as they demonstrate that it has been able to maintain profit margins at acceptable levels, whilst expanding its workforce.

Future developments

The company continues to seek opportunities to increase profitable turnover by securing new contracts and building on existing relationships.

As the company is now part of the wider Copart group, the directors anticipate numerous opportunities for future growth and development and are extremely positive about the prospects for the future growth of the business.

It is also anticipated the company will benefit from various synergies arising from being part of the wider group.

Principal risks and uncertainties

The directors seek to identify inherent and emerging risks and mitigate these as far as possible. The key risks identified are:

Competitive risks

The company operates in a competitive market with the associated commercial risks. To guard against these risks, the company continues its commitment to excellent customer service and ensures that its operational processes are as efficient as possible. It also demonstrates its professionalism by being a member of all the leading industry bodies and associations.

Financial risks

The company's exposure to financial risk is low and the directors prudently manage the financial position of the business. The company's exposure to interest rate increases is low as its borrowings relate to fixed rate hire purchase finance agreements.

Macroeconomic risks

The directors regularly review the wider economy to identify potential risks to the business. A combination of high inflation and increased energy costs has placed significant cost pressures on many businesses within the economy. Although the company has generally been able to manage the impact of these on the business, the directors continue to regularly review its cost base to identify any potential risks.

Section 172(1) statement

Engaging with stakeholders

As part of the directors decision-making process, in line with their duties under section 172 of the Companies Act 2006, they consider the potential impact of decisions on all relevant stakeholders and the likely consequences of these decisions in the long term.

The senior management team make decisions with a long-term view in mind and with the highest standards of conduct in line with company policies and procedures. In the execution of their duties, the directors ensure they consider the probable consequences for all stakeholders in the decisions and actions that they take. Where possible, decisions taken are carefully discussed with affected stakeholders and are, therefore, fully understood and supported.

Details of the company's key stakeholders and how the company engages with them are set out below.

Shareholders

The company's ultimate parent undertaking is Copart Inc. There is regular monthly reporting to the parent undertaking with whom there is open dialogue and clear communication. It is the directors' intention to ensure that the views and opinions of the company's shareholders are always reflected in any key business decisions taken.

Employees

The long-term success of the company relies upon its employees being fully engaged and committed to its strategy and core values. The directors take active steps to ensure that the suggestions, views and interests of the company's employees are considered in decision making.

Customers

Strong customer relationships are crucial to both achieving new business growth and retaining existing business. Consequently, the company regularly engages with its customers via the interactions of the operations team. The company reviews its performance against its customers' expectations via regular dialogue and client feedback. This enables management to assess whether the needs of its customers are being met.

Suppliers

The company works closely with its suppliers to ensure that there are clear frameworks defined for the relationships to operate within, and that appropriate contracts are in place with key suppliers. The directors recognise that the company's relationships with its suppliers are critical.

Government and regulators

The company operates within markets which are subject to laws and regulations which change and evolve. The company regularly engages with its advisors in order to ensure full compliance with all necessary laws and regulations.

Environment

The directors recognise the importance of continuously reducing the company's environmental impact and ensuring ongoing improvements to environmental sustainability performance.

On behalf of the board:

Mr I M Hill - Director

24 April 2024

The directors present their report with the financial statements of the company for the period 1 December 2022 to 31 July 2023.

Principal activity

The principal activity of the company in the period under review was that of the sale and recycling of vehicles.

Dividends

No dividends will be distributed for the period ended 31 July 2023.

Directors

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

Mr I M Hill

Ms J Pocock

Mr S Powers

Other changes in directors holding office are as follows:

Mr J Liaw - resigned 17 January 2023

Mr G Depasquale - resigned 23 December 2022

Ms L C Stearns - appointed 17 January 2023

Mr P K Kirkpatrick - appointed 17 January 2023

Mr K Duty - appointed 17 January 2023

Mr P W Briggs was appointed as a director after 31 July 2023 but prior to the date of this report.

Political donations and expenditure

The company has made no political or charitable contributions during the reporting period.

Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned.

In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged.

It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Creditor payment policy

The company pays all creditors in line with contractual terms and obligations of the specific service contract that has been entered into.

Engagement with employees

The company's policy is to consult and discuss with employees on matters which affect employees' interests.

Information about matters of concern to employees is regularly communicated to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.

Engagement with suppliers, customers and others

The directors firmly believe that maintaining strong, mutually beneficial trading relationships with its suppliers, customers and others with whom the company has a commercial relationship is critical to the long-term success of the business.

The ways in which the company positively interacts with such individuals and entities in order to maintain its key relationships is documented in the section 172 (1) statement within the Strategic Report.

Streamlined energy and carbon reporting

The company is committed to making careful assessments of its levels of energy consumption and the impact of carbon dioxide emissions on the environment. This includes, for example, the installation of energy saving devices, smart meters and low energy lighting.

Energy usage covered in this disclosure covers all professional services provided in the UK, and is primarily the fuel used for transportation of goods to site, delivery of goods to customers, movement of vehicles within the site and electricity and gas consumption within its buildings.

Energy usage has been calculated based on gas and electricity meter readings. Fuel used in respect of road and site haulage, has been established by reference to fuel supplier invoices.

The company has followed the 2019 UK Government environmental reporting guidance and has used the 2023 UK Government conversion factors.

Period ended 31 July 2023

Year Ended 30 November 2022

Kilograms of carbon dioxide equivalent arising from the combustion of fuel for transport.

1,093,427

1,455,442

Kilograms of carbon dioxide equivalent arising from the combustion of oil for heating

17,513

25,085

Kilograms of carbon dioxide equivalent arising from buying electricity

11,451

47,115

Total kilograms of carbon dioxide equivalent

1,122,390

1,527,642

Total energy consumption kWh equivalent

4,224,668

6,408,457

Intensity ratio (kilograms of carbon dioxide equivalent emissions per £ revenue)

0.0394

0.0285

Disclosure in the strategic report

The disclosures in respect of the business review, future developments and the financial risk management, objectives and policies are included in the Strategic Report. The principal activities of the company are also disclosed in the Strategic Report.

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;

-	state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

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

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

Statement as to disclosure of information to auditors

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

Auditors

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

On behalf of the board:

Mr I M Hill - Director

24 April 2024

Opinion

We have audited the financial statements of Green Parts Salvage & Recycling Ltd (the 'company') for the period ended 31 July 2023 which comprise the Statement of Comprehensive Income, Balance Sheet, 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 31 July 2023 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 six, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Auditors' responsibilities for the audit of the financial statements

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

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

- Consideration was given to the entity's susceptibility to material misstatement at all times during the audit including consideration of how fraud could occur. This involved consideration of the nature of the entity's activities and transactions with the potential identification of fraud

- Identification of key laws and regulations considered central to the entity, including a review of any policies and procedures in place to ensure compliance. Key laws and regulations identified include the UK Companies Act, tax legislation, health and safety regulations.

- Ensured that the engagement team had the necessary competence and capabilities to identify any examples of non-compliance at all stages

- Audit work was completed in all relevant areas that were deemed to be appropriate for the client and the associated risks in respect of potential misstatements, including fraud. Our audit work was designed to assess these risks in all areas and included enquiry of management, testing the appropriateness of journal entries, reviewing financial statement disclosures and tracing to relevant documentation as well as the consideration of the risk of potential management override

Due to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing fraud or non-compliance with laws and regulations and cannot be expected to detect all fraud and non-compliance with laws and regulations.

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.

Catherine Rogers BSc FCA (Senior Statutory Auditor)

for and on behalf of NRB

1st Floor Waterside House

Waterside Drive

Wigan

Lancashire

WN3 5AZ

30 April 2024

TURNOVER

4

28,460,806

53,690,051

Cost of sales

20,891,851

38,896,313

GROSS PROFIT

7,568,955

14,793,738

Administrative expenses

4,759,432

7,335,846

2,809,523

7,457,892

Other operating income

5

-

1,291

OPERATING PROFIT

7

2,809,523

7,459,183

Interest receivable and similar income

325,193

19,537

3,134,716

7,478,720

Interest payable and similar expenses

8

3,149

6,121

PROFIT BEFORE TAXATION

3,131,567

7,472,599

Tax on profit

9

687,628

1,405,229

PROFIT FOR THE FINANCIAL PERIOD

2,443,939

6,067,370

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

2,443,939

6,067,370

FIXED ASSETS

Tangible assets

10

1,671,391

1,802,453

Investments

11

2

2

1,671,393

1,802,455

CURRENT ASSETS

Stocks

12

3,607,767

4,084,148

Debtors

13

9,356,627

10,822,504

Cash at bank and in hand

15,617,372

10,697,258

28,581,766

25,603,910

CREDITORS

Amounts falling due within one year

14

4,369,518

3,910,324

NET CURRENT ASSETS

24,212,248

21,693,586

TOTAL ASSETS LESS CURRENT LIABILITIES

25,883,641

23,496,041

CREDITORS

Amounts falling due after more than one year

15

(7,583

)

(31,676

)

PROVISIONS FOR LIABILITIES

18

(365,492

)

(397,738

)

NET ASSETS

25,510,566

23,066,627

CAPITAL AND RESERVES

Called up share capital

19

1

1

Retained earnings

25,510,565

23,066,626

SHAREHOLDERS' FUNDS

25,510,566

23,066,627

The financial statements were approved by the Board of Directors and authorised for issue on 24 April 2024 and were signed on its behalf by:

Mr I M Hill - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 December 2021

1

16,999,256

16,999,257

Changes in equity

Total comprehensive income

-

6,067,370

6,067,370

Balance at 30 November 2022

1

23,066,626

23,066,627

Changes in equity

Total comprehensive income

-

2,443,939

2,443,939

Balance at 31 July 2023

1

25,510,565

25,510,566

1.	STATUTORY INFORMATION

Green Parts Salvage & Recycling Ltd is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

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

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.

Going concern

After reviewing the company's forecasts and projections, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements

Financial Reporting Standard 102 - reduced disclosure exemptions

The directors have taken advantage of the exemption in FRS102 para 1.12 from including a cash flow statement in the financial statements on the grounds that the company is wholly owned and its ultimate parent publishes consolidated financial statements which are publicly available.

Preparation of consolidated financial statements

The financial statements contain information about Green Parts Salvage & Recycling Ltd as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 401 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertakings are included by full consolidation in the consolidated financial statements of its parent, Copart Inc., 14185 Dallas Parkway, Ste 300, Dallas, TX 75254, USA.

Significant judgements and estimates

The preparation of the financial statements requires management to make judgements, estimates and assumptions. As set out in the accounting policy note for stock, provisions are included within the stock figure.This is a key area of judgement and has a significant effect on the financial statements. The calculation of the provision requires the management team to use their experience and expertise.

Turnover

Turnover is stated net of VAT and trade discounts and is recognised when the significant risks and rewards are considered to have been transferred to the buyer. Turnover from the sale of goods is recognised when the goods are delivered to the customer. Turnover from the supply of services represents the value of services provided under contracts to the extent that there is a right to consideration and is recorded at the fair value of consideration received or receivable. Where a contract has only been partially completed at the balance sheet date, turnover represents the fair value of the service provided to date based on the stage of completion of the contract activity at the balance sheet date.

Tangible fixed assets

Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. 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 & machinery - 20% on reducing balance

Fixtures & fittings - 20% on reducing balance

Motor vehicles - 25% on reducing balance

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Stocks

Management assess the value of stock by categorising vehicles into three distinct categories; Vehicles for resale, Dismantled vehicles, Vehicles fully broken down. At each stage of the life of the vehicle, management assess the cost versus the net realisable value. A vehicle for resale is generally held at cost, a dismantled vehicle is regularly reviewed as parts are removed and a fully broken down vehicle is considered to be when the value has been extracted. Fully broken down vehicles are recognised at a scrap value.

The company provides against vehicles held at cost on the basis that not all vehicles realise profits and some vehicles become obsolete and slow moving items.

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 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 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.

Research and development

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

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.

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.

Fixed asset investments

Fixed asset investments are stated at cost less any accumulated impairment losses.

Trade and other debtors

Trade and other debtors are initially recognised at the transaction price and thereafter stated at amortised cost using the effective interest method, less impairment losses for bad and doubtful debts except where the effect of discounting would be immaterial. In such cases, the receivables are stated at cost less impairment losses for bad and doubtful debts.

Trade and other creditors

Trade and other creditors are initially recognised at the transaction price and are thereafter stated at amortised cost using the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost.

4.

TURNOVER

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

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

Period

1.12.22

to

Year Ended

31.7.23

30.11.22

£

£

Sale of goods

25,840,146

49,622,976

Services provided

2,620,660

4,067,075

28,460,806

53,690,051

An analysis of turnover by geographical market is given below:

Period

1.12.22

to

Year Ended

31.7.23

30.11.22

£

£

United Kingdom

27,468,307

51,814,568

Rest of the world

992,499

1,875,483

28,460,806

53,690,051

5.	OTHER OPERATING INCOME

Period

1.12.22

to

Year Ended

31.7.23

30.11.22

£

£

Government grants

-

1,291

The Government grant income relates to claims made under the Coronavirus Job Retention Scheme.

6.	EMPLOYEES AND DIRECTORS

Period

1.12.22

to

Year Ended

31.7.23

30.11.22

£

£

Wages and salaries

3,368,032

4,798,880

Social security costs

320,672

478,054

Other pension costs

61,604

91,883

3,750,308

5,368,817

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

Period

1.12.22

to

Year Ended

31.7.23

30.11.22

Sales and production

155

152

Administration

17

19

172

171

Period

1.12.22

to

Year Ended

31.7.23

30.11.22

£

£

Directors' remuneration

133,333

89,167

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

Money purchase schemes

-

1

7.	OPERATING PROFIT

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

Period

1.12.22

to

Year Ended

31.7.23

30.11.22

£

£

Depreciation - owned assets

250,951

419,950

Depreciation - assets on hire purchase contracts

58,782

91,318

Profit on disposal of fixed assets

(3,350

)

(2,545

)

Auditors' remuneration

18,505

39,925

8.

INTEREST PAYABLE AND SIMILAR EXPENSES

Period

1.12.22

to

Year Ended

31.7.23

30.11.22

£

£

Other interest

3,149

6,121

9.

TAXATION

Analysis of the tax charge

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

Period

1.12.22

to

Year Ended

31.7.23

30.11.22

£

£

Current tax:

UK corporation tax

719,874

1,397,332

Deferred tax

(32,246

)

7,897

Tax on profit

687,628

1,405,229

UK corporation tax has been charged at 22% (2022 - 19%).

Reconciliation of total tax charge included in profit and loss

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

Period

1.12.22

to

Year Ended

31.7.23

30.11.22

£

£

Profit before tax

3,131,567

7,472,599

Profit multiplied by the standard rate of corporation tax in the UK of 22.012% (2022 - 19%)

689,321

1,419,794

Effects of:

Expenses not deductible for tax purposes

2,274

350

Income not taxable for tax purposes

(737

)

(484

)

Capital allowances in excess of depreciation

-

(22,327

)

Depreciation in excess of capital allowances

29,016

-

Deferred tax movement

(32,246

)

7,896

Total tax charge

687,628

1,405,229

The 22% is the effective rate of corporation tax for the period as the main rate of corporation tax increased from 19% to 25% from 1st April 2023.

10.	TANGIBLE FIXED ASSETS

Fixtures

Plant and

and

Motor

machinery

fittings

vehicles

Totals

£

£

£

£

COST

At 1 December 2022

2,624,168

148,670

2,772,985

5,545,823

Additions

88,494

-

92,498

180,992

Disposals

-

-

(8,620

)

(8,620

)

At 31 July 2023

2,712,662

148,670

2,856,863

5,718,195

DEPRECIATION

At 1 December 2022

2,054,936

130,511

1,557,923

3,743,370

Charge for period

85,337

2,510

221,886

309,733

Eliminated on disposal

-

-

(6,299

)

(6,299

)

At 31 July 2023

2,140,273

133,021

1,773,510

4,046,804

NET BOOK VALUE

At 31 July 2023

572,389

15,649

1,083,353

1,671,391

At 30 November 2022

569,232

18,159

1,215,062

1,802,453