P.J. Livesey Holdings Limited - Limited company accounts 20.1

P.J. LIVESEY HOLDINGS LIMITED - Company Information

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REGISTERED NUMBER: 03195231 (England and Wales)

GROUP STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30TH JUNE 2020

FOR

P.J. LIVESEY HOLDINGS LIMITED

Page

Company Information

Group Strategic Report

Report of the Directors

Report of the Independent Auditors

Consolidated Income Statement

Consolidated Other Comprehensive Income

Consolidated Balance Sheet

Company Balance Sheet

Consolidated Statement of Changes in Equity

Company Statement of Changes in Equity

Consolidated Cash Flow Statement

Notes to the Consolidated Cash Flow Statement

Notes to the Consolidated Financial Statements

DIRECTORS:

Mr P J Livesey

Mrs D A Livesey

Mr R Brocklehurst

Mrs G A Lynch

Mr J N D Woodmansee

Mr C D Lynch

Mr M Duckett

SECRETARY:

Mrs D A Livesey

REGISTERED OFFICE:

Ashburton Park

Ashburton Road West

Trafford Park

Manchester

M17 1AF

REGISTERED NUMBER:

03195231 (England and Wales)

AUDITORS:

Ainsworths Limited

Chartered Accountants

and Statutory Auditors

Charter House

Stansfield Street

Nelson

Lancashire

BB9 9XY

The directors present their strategic report of the company and the group for the year ended 30th June 2020.

REVIEW OF BUSINESS

The principal activity of the Group is that of the construction of residential properties, through specialist restoration and new build developments.

The three key performance indicators of the Group are as follows:

1. Shareholders' funds

The directors aim to be able to declare a modest dividend to the shareholders each year whilst also enabling shareholders' funds to grow year on year. Shareholders' funds have increased to £45,045,710 from £45,043,640 at the end of the previous year. The directors are satisfied that the Group has been able to declare dividends and deliver a positive return during challenging times within the construction industry.

2. Cash at bank

The directors look to maintain a healthy cash balance so that there is good availability for furthering developments and in case of an economic downturn. The availability of cash at bank has decreased during the year to £7,760,694 from £11,588,266. Despite the fall, the group still has sufficient cash available and the directors believe this puts the group on a stable footing to continue to procure suitable land for future developments. The impact of the COVID pandemic on planned plot completions in the last quarter of the financial year is reflected in the decreased closing cash position. However, the post year end surge in demand for completions has more than made up for this.

3. Gearing

The directors target a modest level of gearing so as to limit their exposure in times of an economic downturn or housing crash. The gearing level is calculated as debt as a percentage of debt plus equity. The gearing level has remained stable at 33%. The directors are pleased that a modest gearing level has been maintained.

Overall the directors believe the group is in a stable financial position and are satisfied with the performance of the group considering the current economy and construction industry.

PRINCIPAL RISKS AND UNCERTAINTIES

The majority risks and uncertainties facing the Group are related to the future of the property market, availability of suitable sites and the availability of finance. The directors believe that as a result of the timely action they have taken, the group is in a strong position.

The impact of the COVID-19 pandemic is also identified as a risk and uncertainty, however the property market has been buoyant since the year end. Whilst there has been no adverse impact on the Group since the year end, the directors continue to monitor and mitigate any potential impact or consequences the pandemic may cause.

SECTION 172(1) STATEMENT

Statement by the directors in performance of their statutory duties in accordance with Section 172(1) of the Companies Act 2006

We the board of directors, of P.J. Livesey Holdings Limited consider, both individually and together, that we have acted in the way we consider, in good faith, would most likely promote the success of the group for the benefit of our members as a whole in the decisions taken during the year ended 30th June 2020. The following details how we have had regard to the matters set out in s.172(1) (a) to (f) as highlighted in bold below:

The likely consequences of any decision in the long term

The long term success of the Group is always considered in making decisions and this is aligned with the strategy and the risk management procedures within our group. An important factor to achieving this is with the Livesey family (the Group founders) being at the forefront of the strategic decision making, as this is where the passion and drive for excellence originated.

The interests of the group's employees

The board recognises that its employees are fundamental to the success of our business. The health, safety and wellbeing of our employees continues to be a priority, and in recognition of the risk associated with COVID-19 we have implemented new measures to ensure all employees feel safe whilst at work, whether that be on site or at home.

We aim to maintain a working environment that respects the diversity of staff and enables them to achieve their full potential, to contribute fully, and to derive maximum benefit and enjoyment from their involvement in the Group.

The need to foster the company's business relationship with suppliers, customers and others

Stakeholder relationships have been and continue to be a key source of value to our business and key to delivering our strategy.

We seek to promote our values throughout all our stakeholder engagements and consider shared values to be an important factor when engaging with new and existing stakeholders. We conduct regular reviews of current suppliers to ensure that standards are adhered to.

Partnerships are a key cornerstone in our success, and over the years we have formed excellent relationships with local authorities and other property development companies.

For customers, a P J Livesey home allows you to make the most of your life. This comes from always thinking about, and listening to, how people are living their lives before putting pen to plan, and that makes for a home that's designed with real individuality as well as genuine practicality.

The impact of the company's operations on the community and environment

We believe we have a responsibility to protect and care for the environment, and we take our responsibilities seriously.

The centrepiece of every P J Livesey Group development is a period building, and every home we create is built on previously developed land, which means we protect the green and pleasant land surrounding us.

In addition, through our careful and detailed restoration processes we estimate that a great deal of the existing materials within the existing buildings are reused - true sustainable development.

The desirability of the company maintaining a reputation of high standards of business conduct

If there is one area where the P J Livesey Group stand head and shoulders above the competition it is our commitment to quality.

Our continual strive for excellence even extends to the furniture fitted in our developments. Every piece is designed, hand crafted and then installed by our expert in-house team, meaning no compromise is made to quality.

Every employee and contractor working for us maintains the highest standards of professionalism, and as a testament to this we have won numerous NHBC (National House-Building Council), Premier and LABC quality awards.

The need to act fairly between members of the company

After considering all the relevant factors, we consider which course of action best enables delivery of our strategy, taking into consideration the financial reward to our shareholders and the impact on stakeholders and our employees. In doing so, the application of ethical and sustainable policies is highly promoted.

FINANCIAL INSTRUMENTS RISKS

The directors meet regularly to discuss financial instrument risks. In particular, the directors aim to limit undue counterparty exposure, ensure sufficient working capital exists and monitor the management of risk at a business unit level.

ON BEHALF OF THE BOARD:

Mrs G A Lynch - Director

6th May 2021

The directors present their report with the financial statements of the company and the group for the year ended 30th June 2020.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of the construction of residential properties, through specialist restoration and new build developments.

DIVIDENDS

Interim dividends per share were paid as follows:

£2,089.43

- 31st March 2020

£1,660.57

- 30th June 2020

£3,750.00

The directors recommend that no final dividend be paid.

The total distribution of dividends for the year ended 30th June 2020 will be £ 375,000 .

FUTURE DEVELOPMENTS

No changes to the Group's business are anticipated.

DIRECTORS

The directors shown below have held office during the whole of the period from 1st July 2019 to the date of this report.

Mr P J Livesey

Mrs D A Livesey

Mr R Brocklehurst

Mrs G A Lynch

Mr J N D Woodmansee

Mr C D Lynch

Mr M Duckett

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group 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 group'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 group's auditors are aware of that information.

AUDITORS

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

ON BEHALF OF THE BOARD:

Mrs G A Lynch - Director

6th May 2021

Opinion

We have audited the financial statements of P.J. Livesey Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30th June 2020 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 30th June 2020 and of the group's 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 group 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group 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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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 Group 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 Group 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 group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company 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 pages five and 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 group's and the parent 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 group or the parent 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.

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.

Michael Heys (Senior Statutory Auditor)

for and on behalf of Ainsworths Limited

Chartered Accountants

and Statutory Auditors

Charter House

Stansfield Street

Nelson

Lancashire

BB9 9XY

6th May 2021

TURNOVER

36,427,387

60,294,954

Cost of sales

31,435,127

54,316,942

GROSS PROFIT

4,992,260

5,978,012

Distribution costs

961,208

1,368,904

Administrative expenses

3,717,570

4,019,688

4,678,778

5,388,592

313,482

589,420

Other operating income

277,671

78,003

OPERATING PROFIT

591,153

667,423

Loss on the sale of investment property

8,960

591,153

658,463

Interest receivable and similar income

7,038

9,285

598,191

667,748

Interest payable and similar expenses

116,198

177,285

PROFIT BEFORE TAXATION

481,993

490,463

Tax on profit

104,923

88,260

PROFIT FOR THE FINANCIAL YEAR

377,070

402,203

Profit attributable to:

Owners of the parent

377,070

402,203

PROFIT FOR THE YEAR

377,070

402,203

OTHER COMPREHENSIVE INCOME

TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

377,070

402,203

Total comprehensive income attributable to:

Owners of the parent

377,070

402,203

FIXED ASSETS

Tangible assets

7,302,530

7,859,172

Investments

Investment property

1,209,800

8,512,330

9,068,972

CURRENT ASSETS

Stocks

57,697,046

56,677,160

Debtors

3,647,371

2,608,852

Cash at bank and in hand

7,760,694

11,588,266

69,105,111

70,874,278

CREDITORS

Amounts falling due within one year

31,193,440

32,946,320

NET CURRENT ASSETS

37,911,671

37,927,958

TOTAL ASSETS LESS CURRENT
LIABILITIES

46,424,001

46,996,930

CREDITORS

Amounts falling due after more than one
year

(1,293,750

)

(1,868,749

)

PROVISIONS FOR LIABILITIES

(84,541

)

(84,541

)

NET ASSETS

45,045,710

45,043,640

CAPITAL AND RESERVES

Called up share capital

100

Retained earnings

45,045,610

45,043,540

SHAREHOLDERS' FUNDS

45,045,710

45,043,640

The financial statements were approved by the Board of Directors and authorised for issue on 6th May 2021 and were signed on its behalf by:

Mrs G A Lynch - Director

FIXED ASSETS

Tangible assets

1,588,351

1,670,180

Investments

4,079,032

4,000,130

Investment property

5,667,383

5,670,310

CURRENT ASSETS

Stocks

60,011

64,461

Debtors

27,983,929

28,070,125

Cash at bank and in hand

7,658,626

10,121,690

35,702,566

38,256,276

CREDITORS

Amounts falling due within one year

6,172,106

7,797,728

NET CURRENT ASSETS

29,530,460

30,458,548

TOTAL ASSETS LESS CURRENT
LIABILITIES

35,197,843

36,128,858

PROVISIONS FOR LIABILITIES

232,831

NET ASSETS

34,965,012

35,896,027

CAPITAL AND RESERVES

Called up share capital

100

Retained earnings

34,964,912

35,895,927

SHAREHOLDERS' FUNDS

34,965,012

35,896,027

Company's loss for the financial year

(556,015

)

(3,314,108

)

The financial statements were approved by the Board of Directors and authorised for issue on 6th May 2021 and were signed on its behalf by:

Mrs G A Lynch - Director

Called up

Retained

Total

capital

earnings

equity

Balance at 1st July 2018

100

45,016,337

45,016,437

Changes in equity

Dividends

(375,000

)

(375,000

)

Total comprehensive income

402,203

Balance at 30th June 2019

100

45,043,540

45,043,640

Changes in equity

Dividends

(375,000

)

(375,000

)

Total comprehensive income

377,070

Balance at 30th June 2020

100

45,045,610

45,045,710

Called up

Retained

Total

capital

earnings

equity

Balance at 1st July 2018

100

39,585,035

39,585,135

Changes in equity

Dividends

(375,000

)

(375,000

)

Total comprehensive income

(3,314,108

)

(3,314,108

)

Balance at 30th June 2019

100

35,895,927

35,896,027

Changes in equity

Dividends

(375,000

)

(375,000

)

Total comprehensive income

(556,015

)

(556,015

)

Balance at 30th June 2020

100

34,964,912

34,965,012

Cash flows from operating activities

Cash generated from operations

(4,291,496

)

589,493

Interest paid

(116,198

)

(177,285

)

Government grants

277,425

Tax paid

(713,510

)

(1,149,424

)

Net cash from operating activities

(4,843,779

)

(737,216

)

Cash flows from investing activities

Purchase of tangible fixed assets

(13,918

)

(122,545

)

Sale of tangible fixed assets

734,024

Interest received

7,038

9,285

Net cash from investing activities

(6,880

)

620,764

Cash flows from financing activities

New loans in year

15,945,108

23,603,427

Capital repayments in year

(14,571,993

)

(24,440,132

)

Amount introduced by directors

24,972

Amount withdrawn by directors

(234,976

)

Equity dividends paid

(375,000

)

(375,000

)

Net cash from financing activities

1,023,087

(1,446,681

)

Decrease in cash and cash equivalents

(3,827,572

)

(1,563,133

)

Cash and cash equivalents at beginning of
year

11,588,266

13,151,399

Cash and cash equivalents at end of year

7,760,694

11,588,266

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

30.6.20

30.6.19

Profit before taxation

481,993

490,463

Depreciation charges

570,560

561,761

Loss on disposal of fixed assets

49,142

Government grants

(277,425

)

Finance costs

116,198

177,285

Finance income

(7,038

)

(9,285

)

884,288

1,269,366

(Increase)/decrease in stocks

(1,019,886

)

8,131,471

Increase in trade and other debtors

(1,063,491

)

(620,625

)

Decrease in trade and other creditors

(3,092,407

)

(8,190,719

)

Cash generated from operations

(4,291,496

)

589,493

2.	CASH AND CASH EQUIVALENTS

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

Year ended 30th June 2020

30.6.20

1.7.19

Cash and cash equivalents

7,760,694

11,588,266

Year ended 30th June 2019

30.6.19

1.7.18

Cash and cash equivalents

11,588,266

13,151,399

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.7.19

Cash flow

At 30.6.20

Net cash

Cash at bank and in hand

11,588,266

(3,827,572

)

7,760,694

11,588,266

(3,827,572

)

7,760,694

Debt

Debts falling due within 1 year

(20,563,209

)

(1,948,114

)

(22,511,323

)

Debts falling due after 1 year

(1,868,749

)

574,999

(1,293,750

)

(22,431,958

)

(1,373,115

)

(23,805,073

)

Total

(10,843,692

)

(5,200,687

)

(16,044,379

)

1.	STATUTORY INFORMATION

P.J. Livesey Holdings 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 General Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

The Group has remained operational and has continued to trade during the global Coronavirus pandemic. It has not been necessary for the company to access any Coronavirus loan schemes as existing working capital sources have been sufficient to allow for the company's trade to continue. The housing market has been buoyant since the year end and the directors believe the Group will continue to be a going concern for the foreseeable future, being more than twelve months following the approval of these financial statements.

As a consequence these financial statements continue to be prepared on a going concern basis.

Basis of consolidation

The consolidated financial statements include the company and its subsidiary undertakings.

Significant judgements and estimates

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Stocks

Stocks are valued in accordance with the accounting policy given. Costs incurred in pursuing the acquisition of prospective sites are initially recognised as work in progress. Management make judgements at regular milestones as to whether such costs should be expensed to the income statement or carried forwards as work in progress based on the likelihood of prospective sites being acquired, planning permission being granted and subsequently progressing into future developments.

The following are the Group's key sources of estimation uncertainty:

Revaluation of investment properties

The Group carries its investment property at fair value, with changes in fair value being recognised in the income statement. The Group values its investment property using an estimated yield applied to the income generated by the investment property. The estimated yield is based on anticipated market yields.

Estimation of future income and costs to complete

In order to determine the profit the Group is able to recognise on its developments in a particular period, it has to estimate costs to complete on such developments and make estimates relating to future sales price margins on those developments. In making these assessments there is a degree of inherent uncertainty. The Group has developed internal controls to assess and review carrying values and the appropriateness of the estimates made.

If estimated future income is anticipated to be lower than costs incurred to date plus costs to complete, then full provision is made in the period in which such a loss is first foreseen. If costs are incurred on completed developments that exceed provisions for future costs, then such costs are recognised in the Consolidated Income Statement as an expense at that point.

Turnover

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

Turnover from the sale of property is recognised on legal completion.

Rental income is primarily generated from short term hires of the group's fleet. The income is recognised as the fleet is utilised by renters.

Ground rent received on investment properties is recognised on an accruals basis.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Freehold property

2% on cost

Workshop plant and machinery

20% on cost and 10% - 25% on cost

Office fixtures and fittings

20% on cost

Fleet

5% - 20% on cost and 10% - 25% on cost

Site vehicles, plant and machinery

20% on cost

Tangible fixed assets are capitalised at cost.

Government grants

Grant income in respect of expenses or losses already incurred by the entity are recognised in the Consolidated Income Statement in the period when the grant becomes receivable.

Investment property

Investment property consists of freehold ground rent assets and are shown at the most recent valuation. Any aggregate surplus or deficit arising from changes in fair value is recognised in the Consolidated Income Statement. Any gain or loss arising on disposal is recognised in the Consolidated Income Statement.

Stocks

Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Cost includes all direct expenditure and an appropriate proportion of overheads.

Net realisable value is based on estimated selling price less all further costs to completion and disposal.

Financial instruments

Financial assets and financial liabilities are recognised when the group becomes a party to the contractual provisions of the instrument.

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

All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through Consolidated Income Statment, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction the financial asset or liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

The following assets and liabilities are classified as financial instruments:

Investments in subsidiaries, trade debtors, trade creditors, hire purchase contracts, bank loans, directors' loans and inter group balances.

Trade debtors, trade creditors, and directors' loans and inter group balances (being repayable on demand) are measured at the undiscounted amount of cash or other consideration expected to be paid or received.

Hire purchase contracts and bank loans are initially measured at the present value of future payments, discounted at a market rate of interest and subsequently at amortised cost using the effective interest method.

Financial assets 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 profit and loss.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in Consolidated Other Comprehensive Income Statement or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

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

Deferred tax

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

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

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

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The Group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to the Consolidated Income Statement in the period to which they relate.

Payments in respect of other post-retirement benefits are charged to Consolidated Income Statement in the period to which they relate.

Construction contracts

Turnover is recognised on construction contracts on issue of building valuation certificates.

Costs incurred on construction contracts are recognised as work in progress and transferred to the Consolidated Income Statement when a building valuation certificate is issued.

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost less impairment in the individual financial statements.

TURNOVER

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

30.06.20

30.06.19

Sale of residential property

35,380,574

59,255,088

Lease rentals

995,819

981,439

Ground rents

50,994

58,427

36,427,387

60,294,954

4.	EMPLOYEES AND DIRECTORS

30.06.20

30.06.19

Wages and salaries

5,035,026

6,739,623

Social security costs

568,522

765,331

Other pension costs

83,728

76,224

5,687,276

7,581,178

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

30.06.20

30.06.19

Office and management

Production and sales

110

139

Remuneration in respect of directors was as follows:

30.06.20

30.06.19

Directors' remuneration

1,148,997

1,877,065

Defined contribution pension schemes

6,575

5,878

1,155,572

1,882,943

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

Defined contribution pension schemes

5.	OPERATING PROFIT

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

30.6.20

30.6.19

Hire of plant and machinery

3,640

Depreciation - owned assets

570,560

561,761

Loss on disposal of fixed assets

38,099

Foreign exchange differences

28,618

(6,020

)

Auditors' remuneration - company

3,000

2,750

Auditors' remuneration - subsidiaries

23,600

23,000

Auditors' remuneration - taxation compliance services

2,000

Auditors' remuneration - non-audit services

1,990

1,150

Operating lease rentals

336,265

485,315

6.	EXCEPTIONAL ITEMS

30.6.20

30.6.19

Loss on the sale of investment property

(8,960

)

INTEREST PAYABLE AND SIMILAR EXPENSES

30.6.20

30.6.19

Bank interest

8,948

6,404

Other interest

18,082

47,854

Loan interest

89,168

123,027

116,198

177,285

During the year, interest payable amounting to £621,574 (2019: £721,090) has been capitalised within the development cost of properties for resale.

TAXATION

Analysis of the tax charge

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

30.6.20

30.6.19

Current tax:

UK corporation tax

9,278

3,719

Under provision in prior year

95,645

Total current tax

104,923

3,719

Deferred tax

84,541

Tax on profit

104,923

88,260

Reconciliation of total tax charge included in profit and loss

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

30.6.20

30.6.19

Profit before tax

481,993

490,463

Profit multiplied by the standard rate of corporation tax in the UK of 19%
(2019 - 19%)

91,579

93,188

Effects of:

Expenses not deductible for tax purposes

14,943

12,440

Utilisation of tax losses

(2,888

)

(152,164

)

Adjustments to tax charge in respect of previous periods

104,923

202,862

Under provision of tax in the current year

(154,145

)

(123,742

)

Other items

33,686

27,226

Depreciation of non-qualifying assets

5,966

Current year trading losses not utilised

10,859

Current year capital losses not utilised

1,702

Changes in the tax rates

20,782

Total tax charge

104,923

88,260

The Group has trading losses amounting to £1,322,803 available to be utilised against future trading profits. A deferred tax asset of £164,016 has been recognised in respect of £863,244 of these losses. The deferred tax liability in the consolidated accounts is net of this deferred tax asset.

9.	INDIVIDUAL INCOME STATEMENT

As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements.

10.

DIVIDENDS

30.6.20

30.6.19

Ordinary shares of £1 each

Interim

375,000

11.	TANGIBLE FIXED ASSETS

Group

Office

Workshop

fixtures

Freehold

plant and

and

property

machinery

fittings

COST

At 1st July 2019

1,570,000

679,017

1,227,839

Additions

13,918

At 30th June 2020

1,570,000

679,017

1,241,757

DEPRECIATION

At 1st July 2019

219,800

596,249

1,205,479

Charge for year

31,400

37,709

10,444

At 30th June 2020

251,200

633,958

1,215,923

NET BOOK VALUE

At 30th June 2020

1,318,800

45,059

25,834

At 30th June 2019

1,350,200

82,768

22,360

Site

vehicles,

plant and

Fleet

machinery

Totals

COST

At 1st July 2019

7,048,502

457,277

10,982,635

Additions

13,918

At 30th June 2020

7,048,502

457,277

10,996,553

DEPRECIATION

At 1st July 2019

768,243

333,692

3,123,463

Charge for year

456,167

34,840

570,560

At 30th June 2020

1,224,410

368,532

3,694,023

NET BOOK VALUE

At 30th June 2020

5,824,092

88,745

7,302,530

At 30th June 2019

6,280,259

123,585

7,859,172

Company

Office

Workshop

fixtures

Freehold

plant and

and

property

machinery

fittings

COST

At 1st July 2019

1,570,000

275,531

1,227,839

Additions

13,918

At 30th June 2020

1,570,000

275,531

1,241,757

DEPRECIATION

At 1st July 2019

219,800

275,531

1,205,479

Charge for year

31,400

10,444

At 30th June 2020

251,200

275,531

1,215,923

NET BOOK VALUE

At 30th June 2020

1,318,800

25,834

At 30th June 2019

1,350,200

22,360

Site

vehicles,

plant and

Fleet

machinery

Totals

COST

At 1st July 2019

193,903

457,277

3,724,550

Additions

13,918

At 30th June 2020

193,903

457,277

3,738,468

DEPRECIATION

At 1st July 2019

19,868

333,692

2,054,370

Charge for year

19,063

34,840

95,747

At 30th June 2020

38,931

368,532

2,150,117

NET BOOK VALUE

At 30th June 2020

154,972

88,745

1,588,351

At 30th June 2019

174,035

123,585

1,670,180

12.	FIXED ASSET INVESTMENTS

Company

Shares in

group

undertakings

COST

At 1st July 2019

4,000,130

Additions

758,120

Share of profit/(loss)

(678,696

)

Exchange differences

(522

)

At 30th June 2020

4,079,032

NET BOOK VALUE

At 30th June 2020

4,079,032

At 30th June 2019

4,000,130

The Company's investments at the Balance Sheet date in the share capital of companies include the following:

Name of company

Class of
shares

% Holding

Nature of business

P J Livesey South Limited

Ordinary

100.00

Intermediate parent company

P J Livesey North Limited

Ordinary

100.00

Intermediate parent company

P J Livesey Group Limited

Ordinary

100.00

Intermediate parent company

P J Livesey (Manufacturing) Limited

Ordinary

100.00

Manufacture of furniture

P J Livesey Living Space Limited

Ordinary

100.00