Team (Impression) Limited - Limited company accounts 22.3

REGISTERED NUMBER: 04210104 (England and Wales)

Strategic Report,

Report of the Directors and

Financial Statements

for the Year Ended 31 May 2022

for

Team (Impression) Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

5

Report of the Independent Auditors

6

Profit and Loss Account

9

Balance Sheet

10

Statement of Changes in Equity

11

Notes to the Financial Statements

12

DIRECTORS:

S J Bucktrout

P J Crowson

REGISTERED OFFICE:

Fusion House

1 Lockwood Close

Leeds

West Yorkshire

LS11 5UU

REGISTERED NUMBER:

04210104 (England and Wales)

AUDITORS:

Kirk Newsholme

Chartered Accountants and Statutory Auditors

4315 Park Approach

Thorpe Park

Leeds

West Yorkshire

LS15 8GB

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

REVIEW OF BUSINESS

The Directors have pleasure in reporting an increase in turnover and gross profit for the financial year ended 31 May 2022. The business demonstrated resilience through the trading challenges of COVID during the first six months of the year and then controlled with confidence the increase in activity through the last six months of the year.

Profit before tax was £252,470 (2021 - £171,078).

There was an increase in gross profit to £1,848,373 in 2022 (£1,204,451 in 2021), an increase of £643,922. This was achieved on turnover of £6,127,965 (2021 - £4,781,052 ) i.e. on a 28.2% increase in turnover. The gross margin increased to 30.2% (2021 - 25.2%). Government support from the Corona Virus Job Retention Scheme totalled £126,539 (2021 - £810,436), which is shown as other income.

In the prior year the Directors reviewed the balance sheet and implemented cash management procedures which included deferring loan repayments. Careful management of working capital on the recommencement of capital finance payments in the year and profitable trading maintained cash reserves as the company ended the year with a cash balance of £248,771 (2021 - £236,385). At the year end, shareholder's funds totalled £1,351,321 (2021 - £1,367,660).

The business has maintained a good reputation in the market place and is experiencing an increase in sales activity across all areas, this is being maintained by adding value, improved productivity, management of cash and overhead cost reduction. The environmental impact of the business is carefully managed and controlled to ensure a reduction in its carbon footprint is achieved,

Post year end the business has continued to increase turnover, trade profitably and generate cash. Forecasts have been prepared that show a continued increase in activity over the next 12 months and performance is regularly monitored against the budget.

The Directors are very positive about the foreseeable future and are confident with the business plan going forward, the maintenance of its reputation, staff welfare and customer satisfaction remain the core principles of the business.

Key performance indicators

Note

2022

2021

Turnover

1

£6,127,965

£4,781,052

Gross profit %

2

30.2%

25.2%

Operating profit

3

£411,625

£352,647

Operating profit %

3

6.7%

7.4%

Cash at bank and in hand

4

248,771

£236,385

Shareholder's Funds

5

£1,351,321

£1,367,660

Source data is taken from the audited financial statements.

Key performance indicators (continued)

Notes to KPI's.

1 & 2. Turnover and gross profit

The company aims to increase profitability by monitoring levels of turnover and gross profit.

The company aims to manage costs and increase efficiency to be able to reinvest for future business development opportunities.

3. Operating profit and operating profit %

The company aims to maximise underlying profitability for the purpose of either investing back in to the business or for distributing to shareholders and uses operating profit to measure this.

4. Cash at bank and in hand

The company aims to maintain sufficient cash and facilities to address the principal risks and uncertainties facing the company. The company constantly monitors its cash position in order to manage this position.

5. Shareholders' Funds

The company reviews the amount of capital required to fund the trading activities throughout the year.

Key performance indicators are monitored against expectations. The directors feel that these have been satisfactorily met in respect of the current financial year.

PRINCIPAL RISKS AND UNCERTAINTIES

Global and other macroeconomic risks

The current political and economic climate continues to drive significant uncertainty across all businesses. Supply chains continue to face significant pressure as the global economy emerges from the COVID-19 pandemic, with this manifesting itself in increasing inflationary cost pressure and lower levels of reliability and resilience. The invasion of Ukraine by Russia, and the resulting sanctions, has increased political tensions and created significant volatility in energy and commodity markets. Following COP26 the UK government re-affirmed commitment to ambitious targets for reductions of greenhouse emissions will necessitate significant changes to production processes, and government policy is clearly committed to placing the costs of these changes with businesses, with the introduction of policies such as the plastic tax.

All of these pressures come at a time where end consumers are seeing their disposable income being eroded, with pay increases not keeping pace with inflation, and this presents a significant risk in the company's customers home market.

In addition to the above, the company's European markets continue to be impacted by the uncertainty surrounding the UK's future trading relationship with the EU. This will continue until a more comprehensive agreement on trade is reached.

Whilst the directors consider that all of these events do create real and significant business threats they also believe that they will create other significant opportunities. The innovative position taken by the company and its short lines of management reporting means it can quickly re-position itself in light of future developments.

Operational risk

Accurate reporting systems and the monthly reviewing of accurate and timely management information is key to reducing operational risk.

Major customer loss

The market for printing services remains highly competitive. The company seeks to manage the risk of losing customers to key competitors by the provision of added value services to customers, improving response times in the supply of products. Rigorous management attention and quality control procedures are in place to maximise the delivery of quality and on time delivery.

Principal Risks and uncertainties (continued)

Cyber security

The company's IT infrastructure is an integral part of its operations. The systems, and the data held within, require to be robust and private. The risks of compromised systems and data through a cyber attack or other security threats are key risks for any organisation. The company continually reviews its policies and security tools with its partners with a view to implementing appropriate levels of protection.

FINANCIAL INSTRUMENTS

The company's operations expose it to a variety of financial risks including credit risk and liquidity risk.

The company does not have material exposure in any of the areas identified above.

The company's principal financial instruments comprise sterling cash and bank deposits, together with trade debtors and trade creditors that arise directly from operations.

The main risks arising from the company's financial instruments can be analysed as follows:

Credit risk

The company's credit risk is primarily attributable to its trade debtors. Credit risk is mitigated by monitoring and management of the credit limits of customers.

ON BEHALF OF THE BOARD:

P J Crowson - Director

29 November 2022

The directors present their report with the financial statements of the company for the year ended 31 May 2022.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of commercial litho, digital and large format printing.

DIVIDENDS

The results for the year are shown on the profit and loss account on page 7. An interim dividend of £177,173 (2021 - £207,178) was paid in the year.

DIRECTORS

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

S J Bucktrout

P J Crowson

THIRD PARTY INDEMNITY PROVISION FOR DIRECTORS

Qualifying third party indemnity provision is in place for the benefit of all directors of the company.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

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

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

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

ON BEHALF OF THE BOARD:

P J Crowson - Director

29 November 2022

Opinion

We have audited the financial statements of Team (Impression) Limited (the 'company') for the year ended 31 May 2022 which comprise the Profit and Loss Account, 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 May 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 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.

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 and Report of the Directors.

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

-

adequate accounting records have not been kept, or returns adequate for our audit have not been

received from branches not visited by us; or

-

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

-

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

-

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

Responsibilities of directors

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

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

Auditors' responsibilities for the audit of the financial statements

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.

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 sector experience;

-

We focused on specific 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. The company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on the financial statements, for instance through the imposition of fines, penalties or litigation such as data protection, health and safety and employment 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

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 any 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;

-

Enquiring of management as to actual and potential litigation and claims;

-

Reviewing correspondence with HMRC and relevant regulators websites for notice of any breaches; and

-

Review of relevant legal or professional costs within the accounting records for any evidence of previously un-detected or un-reported instances of non-compliance.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

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.

Jill Wright BA FCA (Senior Statutory Auditor)

for and on behalf of Kirk Newsholme

Chartered Accountants and Statutory Auditors

4315 Park Approach

Thorpe Park

Leeds

West Yorkshire

LS15 8GB

29 November 2022

TURNOVER

3

6,127,965

4,781,052

Cost of sales

4,279,592

3,576,601

GROSS PROFIT

1,848,373

1,204,451

Administrative expenses

1,644,383

1,753,367

203,990

(548,916

)

Other operating income

4

207,635

901,563

OPERATING PROFIT

7

411,625

352,647

Interest receivable and similar income

92

51

411,717

352,698

Gain on revaluation of investments

-

20,000

411,717

372,698

Interest payable and similar expenses

8

159,247

201,620

PROFIT BEFORE TAXATION

252,470

171,078

Tax on profit

9

91,636

(42,413

)

PROFIT FOR THE FINANCIAL YEAR

160,834

213,491

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

160,834

213,491

FIXED ASSETS

Intangible assets

11

85,397

112,897

Tangible assets

12

4,776,016

4,989,294

4,861,413

5,102,191

CURRENT ASSETS

Stocks

13

391,626

300,106

Debtors

14

1,691,178

1,315,654

Investments

15

20,000

20,000

Cash at bank

248,771

236,385

2,351,575

1,872,145

CREDITORS

Amounts falling due within one year

16

3,235,206

2,535,459

NET CURRENT LIABILITIES

(883,631

)

(663,314

)

TOTAL ASSETS LESS CURRENT LIABILITIES

3,977,782

4,438,877

CREDITORS

Amounts falling due after more than one year

17

(1,992,965

)

(2,557,222

)

PROVISIONS FOR LIABILITIES

21

(633,496

)

(513,995

)

NET ASSETS

1,351,321

1,367,660

CAPITAL AND RESERVES

Called up share capital

22

534,666

534,666

Revaluation reserve

23

264,942

264,942

Retained earnings

23

551,713

568,052

SHAREHOLDERS' FUNDS

1,351,321

1,367,660

The financial statements were approved by the Board of Directors and authorised for issue on 29 November 2022 and were signed on its behalf by:

P J Crowson - Director

Called up

share

Retained

Revaluation

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 June 2020

534,666

561,739

264,942

1,361,347

Changes in equity

Dividends

-

(207,178

)

-

(207,178

)

Total comprehensive income

-

213,491

-

213,491

Balance at 31 May 2021

534,666

568,052

264,942

1,367,660

Changes in equity

Dividends

-

(177,173

)

-

(177,173

)

Total comprehensive income

-

160,834

-

160,834

Balance at 31 May 2022

534,666

551,713

264,942

1,351,321

1.	COMPANY INFORMATION

Team (Impression) Limited is a company limited by shares, incorporated in England & Wales. Its registered office is given on page 1.

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 functional currency of the company is considered to be pounds sterling.

Financial Reporting Standard 102 - reduced disclosure exemptions

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 requirement of paragraph 33.7.

Going concern

The financial statements have been prepared using the going concern basis. The global and macro economic risks as detailed in the strategic report on page 3 will continue to have an impact on all businesses. What this impact might be remains uncertain, however during the period the company has demonstrated its ability to withstand these adversities.

The directors consider that given the headroom in financing facilities and the option of further financing that the company is in a strong position to overcome the challenges that may arise over the coming months. The directors have prepared formal cash flow forecasts covering the period to May 2023 and reviewed expectations beyond that and these show that the company should have sufficient financial resources. After consideration of these factors, the directors consider it appropriate to prepare the financial statements on a going concern basis.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned companies within the group.

Turnover

Turnover is revenue arising from the sale of goods and associated services and is measured at the fair value of the consideration received or receivable, excluding value added tax and rebates and discounts. Turnover is recognised when the significant risks and rewards are considered to have transferred to the customer, which is on delivery of the goods.

Intangible assets - goodwill

Goodwill arising on acquisition of a business representing the excess of consideration over the fair value of the assets acquired is capitalised and written off on a straight line basis over its economic life of 10 years.

Tangible fixed assets

Fixed assets are stated at cost or valuation net of accumulated depreciation and any provision for impairment.

Depreciation is provided on all tangible fixed assets, with the exception of the land element of freehold land and buildings, in order to write off the cost less estimated residual value of each asset over its estimated life, or if held under a finance lease, over the lease term, whichever is the shorter.

The directors have estimated that the valuation of non-depreciable land is approximately 50% of the total value of the freehold land and buildings.

Freehold buildings

-

2% on cost or valuation

Leasehold property

-

Over the period of the lease

Motor vehicles

-

50% & 33% on cost

Equipment, fixtures and fittings

-

50% on cost in year one, 25% reducing balance thereafter

Plant and machinery

-

7 - 25% on cost in year one, 5 - 25% reducing balance

thereafter

Computer equipment

-

50% of cost in year one, 25% reducing balance thereafter

Residual value represents the estimated amount which would currently be obtained from disposal of an

asset, after deducting estimated costs of disposal, if the asset were already at the age and in the

condition expected at the end of its useful economic life.

The need for any fixed asset impairment write down is assessed by comparison of the carrying value of the assets against the higher of realisable value and value in use.

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

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to sell, which is equivalent to net realisable value, after provisions are made in respect of obsolete and slow moving items, based on historical experience of utilisation on a category-by-category basis.

Costs of raw materials and consumables are based on purchased cost on a first-in, first-out basis.

Work in progress

Cost of work in progress is based on the cost of direct materials and labour plus attributable overheads based on a normal level of activity, on a first-in, first-out basis. Provision is made for any foreseeable losses where appropriate. No element of profit is included in the valuation of work in progress.

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

Taxation

Current tax, including UK corporation tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the company's taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to the reversal of the timing difference.

Cash and cash equivalents

Cash and cash equivalents include cash in hand and deposits held at call with banks.

Investments

Where the value of investments can be reliably measured they are measured at fair value through the profit and loss account.

Hire purchase and lease transactions

Assets held under finance leases, hire purchase contracts and other similar arrangements, which confer rights and obligations similar to those attached to owned assets, are capitalised as tangible fixed assets at the fair value of the leased asset (or, if lower the present value of the minimum lease payments as determined at the inception of the lease). The capital elements of future lease obligations are recorded as liabilities, while the interest elements are charged to the profit and loss account over the period of the leases to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on a straight-line basis over the lease term.

Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense. Where material, the cost of any unused holiday entitlement is recognised in the period in which the employee's services are received.

Pension scheme

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

Financial instruments

Financial assets and financial liabilities are recognised when the company 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 company after deducting all of its liabilities.

All financial assets and liabilities are initially measured at transaction price (including transaction costs) 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 financial 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 basic financial instruments - trade debtors, other debtors, trade creditors, other creditors, bank loans, accruals and directors current accounts.

Trade debtors, other debtors, trade creditors, other creditors, accruals and directors current accounts are measured at the undiscounted amount of cash or other consideration expected to be paid or received.

Bank loans that have fixed or determinable payments that are not quoted in an active market are measured at amortised cost using the effective interest method. The effective interest rate is a method of calculating the amortised cost of a debt instrument and of allocating the interest over the relevant period.

Impairment of assets

Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date, if there is objective evidence of impairment, an impairment loss is recognised in profit and loss as described below.

Non financial assets

An asset is impaired when there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

Financial assets

For financial assets carried at cost less impairment, the impairment loss is the difference between the asset's carrying amount and the best estimate of the amount that would be received for the asset if it were sold at the reporting date.

Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on a individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had not impairment been recognised.

Critical accounting judgements and sources of estimation uncertainty

In the application of the Company's accounting policies, management is required to make judgements, estimates and assumptions about carrying values 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The critical judgements that the directors have made in applying the company's accounting policies and the key sources of estimation uncertainty that have had the most significant effect on the amounts recognised in the financial statements are described below:

Useful economic lives of tangible assets

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.

Property valuation

The company measures freehold property at fair value based on professional valuations at intervals considered appropriate by directors.

3.

TURNOVER

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

An analysis of turnover by geographical market is given below:

2022

2021

£

£

United Kingdom

6,082,040

4,739,391

Europe

-

39,486

United States of America

-

2,175

Asia

45,925

-

6,127,965

4,781,052

Turnover relates wholly to the sale of goods

4.	OTHER OPERATING INCOME

2022

2021

£

£

Miscellaneous income

35,210

28,547

Government grants

45,886

62,580

Government grants - CJRS

126,539

810,436

207,635

901,563

5.	EMPLOYEES AND DIRECTORS

2022

2021

£

£

Wages and salaries

1,709,351

1,897,697

Social security costs

143,693

163,422

Other pension costs

68,010

154,222

1,921,054

2,215,341

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

2022

2021

Administrative staff

14

12

Production staff

53

66

67

78

6.	DIRECTORS' EMOLUMENTS

2022

2021

£

£

Directors' remuneration

57,707

57,080

Directors' pension contributions to money purchase schemes

6,600

86,600

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

Money purchase schemes

1

2

7.	OPERATING PROFIT

The operating profit is stated after charging:

2022

2021

£

£

Depreciation - owned assets

119,607

123,070

Depreciation - assets on hire purchase contracts

132,026

142,523

Goodwill amortisation

27,500

27,500

Auditors remuneration

15,200

14,500

Operating lease rentals

99,123

101,589

8.

INTEREST PAYABLE AND SIMILAR EXPENSES

2022

2021

£

£

Bank overdraft interest

430

333

Bank loan interest

59,824

68,257

Loan interest

23,035

23,210

Hire purchase

71,855

108,344

Other interest

4,103

1,476

159,247

201,620