Gemini Accident Repair Centres Limited - Limited company accounts 20.1

REGISTERED NUMBER: 06628091 (England and Wales)

Strategic Report,

Report of the Directors and

Audited Financial Statements

for the Year Ended 31 December 2020

for

GEMINI ACCIDENT REPAIR CENTRES LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

5

Report of the Independent Auditors

8

Statement of Comprehensive Income

11

Balance Sheet

12

Statement of Changes in Equity

13

Cash Flow Statement

14

Notes to the Cash Flow Statement

15

Notes to the Financial Statements

16

Directors:

D J Sargeant

P Coleman

T S Hopkins

Registered office:

5-6 Greenfield Crescent

Edgbaston

Birmingham

West Midlands

B15 3BE

Registered number:

06628091 (England and Wales)

Independent auditors:

Haines Watts Birmingham LLP

5-6 Greenfield Crescent

Edgbaston

Birmingham

B15 3BE

Bankers:

Barclays Bank Plc

66 Oxford Street

Kidderminster

DY10 1BL

Solicitors:

Harrison Clark Rickerbys

5 Deansway

Worcester

Worcestershire

WR12 2JG

The directors present their strategic report for the year ended 31 December 2020.

Review of business

We aim to present a balanced and comprehensive review of the development and performance of the business during the year and its position at the year end. Our review is consistent with the size and nature of the business and is written in the context of risks and uncertainties faced.

The company is a motor accident repairer with multiple garages.

We consider that our key financial performance indicators are those that communicate the financial performance and strength of the company as a whole, these being turnover, gross margin and operating profit.

The SARS-CoV-2 pandemic significantly reduced road traffic and impacted work volumes throughout the period of these accounts, and as such turnover during the year decreased by 21% from 2019 to £46.6m (2019: £59.0m).

Operating profit was at £1.14m (2019: £1.03m) and, after interest, the pre-tax profit was £949k (2019: £879k).

The results for the year include the various government financial support schemes designed to support businesses affected by the Covid-19 pandemic being the job retention scheme, business premises rates relief and payment deferral agreements.

The directors are satisfied with the results for the year.

Principal risks and uncertainties

The business environment in which we operate continues to be challenging. The motor accident repairs market in the UK is highly competitive and the general economic outlook is uncertain given the effects of the Covid-19 pandemic and Brexit.

With these risks and uncertainties in mind, we are aware that any plans for the future development of the business may be affected by unforeseen future events outside of our control.

Section 172(1) statement

We, the directors of GARC, have a legal responsibility under section 172 of the Companies Act 2006 to act in the way we consider, in good faith, would be most likely to promote the company's success for the benefit of its members as a whole, and to have regard to the long-term effect of our decisions on the company and its stakeholders.

Promoting the company's success for its members

This statement focuses on matters of strategic importance to GARC and addresses the ways in which the directors show their responsibility in promoting the company's success for its members. We make strategic decisions based on long-term objectives. In particular, this has meant significant investment in all areas of the business, including the set-up of state-of-the-art modern repair centres with the latest technology and equipment to ensure that we can provide and maintain high quality repair services to our insurer partners and customers.

With evolution of car technology and the rapidly advancing movement to electric vehicles we have ensured all of our sites have the capability, knowledge and the latest equipment to receive and repair these vehicles. This investment has been funded through our own resources and working capital. This has been at the expense of short-term gains but positions the company to supply the capacity and the service required over the longer term to our customers and insurer partners.

Stakeholder engagement

Our key stakeholders, and the ways in which we engage with them, are as follows:

Our employees

We rely on our skilled and committed workforce to carry out the processes and techniques required to facilitate the safe and effective repair of modern cars. Our employees are the reason we are able to deliver an outstanding performance to our customers and partners, and we are renowned for our customer service and have won numerous industry awards to celebrate this fact.

We could not achieve and maintain these levels of service without our team. Development and investment in our employees are therefore a critical business activity and we have demonstrated our commitment to investing in the future of the company by establishing an apprentice program which has won numerous awards and accolades. We currently have 75 apprentices, which represents over 15% of our total staff, in training on both internal and external programs that have been designed bespoke to the Gemini processes.

Further examples of how we engage with our employees are set out below;

1. provide and maintain a safe and professional working environment (working conditions)

2. invest in the latest technology to provide our staff with the right repair equipment

3. setting remuneration at market-leading rates, and share rewards with bonuses at all levels

4. provide training and career development opportunities at all levels

5. enrolling all staff into our employee benefits and health care program

6. ensuring that staff in every site are involved and aware of all company initiatives and strategies

Our customers and suppliers

We invest heavily in creating ultra-modern repair centres that can continue to offer our customers and our partners the very best in repair methods with safe and effective car repair solutions and a minimum turnaround time for customers. Our whole business model prioritises quality and safety with the delivery of the customers required outcomes.

We are focused on developing meaningful strategic partnerships with our customers and have created dedicated repair centres located across the UK that are exclusive to our insurer partners demonstrating the value and commitment within our customer partnerships.

Our suppliers are key to our making this happen and we remain loyal to all our suppliers ensuring they are able to invest and innovate, meaning our service delivery is further enhanced by having access to the latest repair technology and the latest products to help our skilled workforce deliver the quality and service required.

Our planet

Our entire industry, like many others, has contributed to environmental pollution in the past and we are now all working hard to reverse this. We at Gemini recognise the need to make changes to protect our environment and have started several initiatives to reduce our impact on the environment.

By design our entire business model was created to remove all in-efficiencies and unnecessary costs and wastage from the repair process. We have reduced the number of new parts fitted across all repairs, we always attempt to re-use and repair the original parts and we always look to reduce the repair size to minimise the use of materials and products needed to re-finish the car.

Our commitment to the planet is further demonstrated by our carbon emissions offset plan and the PAS2060 accreditation we have gained at 8 of our repair sites in this year. Details of our full carbon footprint emissions and reporting actions are included within the Directors' Report under Streamlined Energy and Carbon Reporting.

On behalf of the board:

P Coleman - Director

30 September 2021

The directors present their report with the financial statements of the company for the year ended 31 December 2020.

Principal activity

The principal activity of the company in the year under review was that of motor vehicle repair work.

Dividends

The total distribution of dividends for the year ended 31 December 2020 will be £174,147.

Directors

The directors shown below have held office during the whole of the period from 1 January 2020 to the date of this report.

D J Sargeant

P Coleman

T S Hopkins

Financial risk management

Liquidity risk

The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.

Interest rate risk

The company is exposed to fair value interest rate risk on its fixed rate borrowings and cash flow interest rate risk on floating rate deposits, bank overdrafts and loans.

Credit risk

All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.

Employment policies

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.

Employee involvement

The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.

There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.

Streamlined energy and carbon reporting

Gemini Accident Repair Centres Limited are a 'large unquoted' under the Streamlined Energy and Carbon Reporting regulations so must report annually on greenhouse gas emissions from Scope 1 and 2 Electricity, Gas and Transport. This is the first reporting year so no emissions from previous years are available as a comparison.

Methodology

The reporting period is the most recent financial year 01/01/2020 to 31/12/2020. This report has been compiled in line with the March 2019 BEIS 'Environmental Reporting Guidelines: Including streamlined energy and carbon reporting guidance', and the EMA methodology for SECR Reporting. All measured emissions from activities which the organisation has financial control over are included as required under The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, unless otherwise stated in the exclusions statement.

The carbon figures have been calculated using the BEIS 2020 carbon conversion factors for all fuels, other than the market based electricity which has been taken from Total Gas & Power as the UK supplier.

UK Carbon Footprint Data 2019-20

Scope

Description

Specific fuels

tC02e

1

Combustion of fuel on site and transportation

On site: Natural Gas, Gas Oil, Kerosene, Propane

1,275

Transport: Petrol, Diesel

658

Total

1,933

2

Purchased energy

Electricity

Location based 692

Market based 828

3

Indirect Emissions

0

Total

Location based

2,625

Market based

2,761

Intensity Ratio

tC02e/£1m Turnover

Location based

56.30

Market based

59.22

Energy Usage

Total kWh consumed

Electricity, Natural Gas, Gas Oil, Kerosene, Propane, Petrol, Diesel

12,611,165

Emissions detailed by fuel type (location based method)

Fuel Type

%

Electricity

26

Propane

0

Kerosene

1

Diesel

17

Natural Gas

46

Gas Oil

1

Petrol

9

Energy Efficiency Actions taken

>

18 sites have been converted to low energy LED lighting

>

Electric Vehicle charging points have been installed at 8 sites

>

Gemini have reduced travel through holding meetings, audits and training programs virtually

Statement of Exclusions

Scope 1 exclusions - no exclusions made

Scope 2 exclusions - purchased electricity does not include the Transmission and Distribution element as this is owned by the supplier

Scope 3 exclusions - voluntary for SECR

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;

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

Auditors

The auditors, Haines Watts Birmingham LLP, are deemed to be reappointed under s487(2) of the Companies Act 2006.

On behalf of the board:

P Coleman - Director

30 September 2021

Opinion

We have audited the financial statements of Gemini Accident Repair Centres Limited (the 'company') for the year ended 31 December 2020 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the 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 company's affairs as at 31 December 2020 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.

However, not all future events or conditions can be predicted. The COVID-19 viral pandemic is one of the most significant economic events for the UK with unprecedented levels of uncertainty of outcomes. It is therefore difficult to evaluate all of the potential implications on the company's trade, customers, suppliers and wider economy. The directors' view on the impact of COVID-19 is disclosed in the accounting policies note.

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 pages six and seven, 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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We obtained an understanding of the legal and regulatory framework applicable to both the company itself and the industry in which it operates. We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our sector experience and through discussion with the directors and other management. The most significant were identified as the Companies Act 2006, UK GAAP (FRS102) and relevant tax legislation.

We considered the extent of compliance with those laws and regulations as part of our procedures on the related financial statements. Our audit procedures included:

-

making enquires of directors and management as to where they consider there to be a susceptibility to fraud and whether they have any knowledge or suspicion of fraud;

-

obtaining an understanding of the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations;

-

assessing the design effectiveness of the controls in place to prevent and detect fraud;

-

assessing the risk of management override including identifying and testing journal entries;

-

challenging the assumptions and judgements made by management in its significant accounting estimates.

Whilst our audit did not identify any significant matters relating to the detection of irregularities including fraud, and despite the audit being planned and conducted in accordance with ISAs (UK), there remains an unavoidable risk that material misstatements in the financial statements may not be detected owing to inherent limitations of the audit, and that by their very nature, any such instances of fraud or irregularity would likely involve collusion, forgery, intentional misrepresentations, or the override of internal controls.

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.

Kevin Hodgetts (Senior Statutory Auditor)

for and on behalf of Haines Watts Birmingham LLP

5-6 Greenfield Crescent

Edgbaston

Birmingham

B15 3BE

30 September 2021

Turnover

4

46,620,376

59,028,937

Cost of sales

(28,053,748

)

(35,311,148

)

Gross profit

18,566,628

23,717,789

Distribution costs

(1,923,133

)

(2,358,170

)

Administrative expenses

(19,540,620

)

(20,425,218

)

(2,897,125

)

934,401

Other operating income

4,036,475

91,781

Operating profit

6

1,139,350

1,026,182

Interest payable and similar expenses

7

(189,900

)

(147,236

)

Profit before taxation

949,450

878,946

Tax on profit

8

(54,300

)

(21,946

)

Profit for the financial year

895,150

857,000

Other comprehensive income

-

-

Total comprehensive income for the year

895,150

857,000

Fixed assets

Intangible assets

10

733,334

953,334

Tangible assets

11

7,975,736

8,229,971

Investments

12

50,100

50,100

8,759,170

9,233,405

Current assets

Stocks

13

662,280

751,497

Debtors

14

6,134,104

8,475,423

Cash at bank and in hand

1,123,902

4,677

7,920,286

9,231,597

Creditors

Amounts falling due within one year

15

11,646,708

13,278,951

Net current liabilities

(3,726,422

)

(4,047,354

)

Total assets less current liabilities

5,032,748

5,186,051

Creditors

Amounts falling due after more than one year

16

(1,173,336

)

(2,049,777

)

Provisions for liabilities

20

(314,343

)

(312,208

)

Net assets

3,545,069

2,824,066

Capital and reserves

Called up share capital

21

1,000

1,000

Retained earnings

22

3,544,069

2,823,066

Shareholders' funds

3,545,069

2,824,066

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2021 and were signed on its behalf by:

P Coleman - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2019

1,000

2,237,640

2,238,640

Changes in equity

Dividends

-

(271,574

)

(271,574

)

Total comprehensive income

-

857,000

857,000

Balance at 31 December 2019

1,000

2,823,066

2,824,066

Changes in equity

Dividends

-

(174,147

)

(174,147

)

Total comprehensive income

-

895,150

895,150

Balance at 31 December 2020

1,000

3,544,069

3,545,069

Cash flows from operating activities

Cash generated from operations

1

4,307,334

3,094,143

Interest paid

(189,900

)

(147,236

)

Tax paid

14,816

(159,353

)

Net cash from operating activities

4,132,250

2,787,554

Cash flows from investing activities

Purchase of intangible fixed assets

-

(1,100,000

)

Purchase of tangible fixed assets

(890,496

)

(2,094,360

)

Sale of tangible fixed assets

296,569

237,334

Net cash from investing activities

(593,927

)

(2,957,026

)

Cash flows from financing activities

Loan repayments in year

(47,600

)

(68,844

)

Capital repayments in year

(315,717

)

(431,187

)

Amount introduced by directors

-

93,744

Amount withdrawn by directors

(68,018

)

-

Other new loans in year

-

1,111,111

Other loans repaid

(544,875

)

(333,333

)

Equity dividends paid

(174,147

)

(271,574

)

Net cash from financing activities

(1,150,357

)

99,917

Increase/(decrease) in cash and cash equivalents

2,387,966

(69,555

)

Cash and cash equivalents at beginning of year

2

(1,264,064

)

(1,194,509

)

Cash and cash equivalents at end of year

2

1,123,902

(1,264,064

)

1.	Reconciliation of profit before taxation to cash generated from operations

2020

2019

£

£

Profit before taxation

949,450

878,946

Depreciation charges

1,087,995

1,045,800

Profit on disposal of fixed assets

(35,867

)

(53,488

)

Finance costs

189,900

147,236

2,191,478

2,018,494

Decrease/(increase) in stocks

89,217

(135,060

)

Decrease in trade and other debtors

2,409,337

70,294

(Decrease)/increase in trade and other creditors

(382,698

)

1,140,415

Cash generated from operations

4,307,334

3,094,143

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 31 December 2020

31/12/20

1/1/20

£

£

Cash and cash equivalents

1,123,902

4,677

Bank overdrafts

-

(1,268,741

)

1,123,902

(1,264,064

)

Year ended 31 December 2019

31/12/19

1/1/19

£

£

Cash and cash equivalents

4,677

10,629

Bank overdrafts

(1,268,741

)

(1,205,138

)

(1,264,064

)

(1,194,509

)

3.	Analysis of changes in net debt

At 1/1/20

Cash flow

At 31/12/20

£

£

£

Net cash

Cash at bank and in hand

4,677

1,119,225

1,123,902

Bank overdrafts

(1,268,741

)

1,268,741

-

(1,264,064

)

2,387,966

1,123,902

Debt

Finance leases

(1,153,597

)

315,717

(837,880

)

Debts falling due within 1 year

(567,005

)

(56,608

)

(623,613

)

Debts falling due after 1 year

(1,311,560

)

649,083

(662,477

)

(3,032,162

)

908,192

(2,123,970

)

Total

(4,296,226

)

3,296,158

(1,000,068

)

1.	Statutory information

Gemini Accident Repair Centres Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

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.

Going concern

The directors consider that the company has sufficient resources to continue operating as a going concern for a period of at least twelve months from the date of signing the financial statements. The financial statements have therefore been prepared on a going concern basis.

The impact of COVID-19

In response to the COVID-19 viral pandemic, the directors have further considered their cash flow projections to take into account the impact on the business of possible scenarios brought on by the impact of COVID-19, alongside the measures that they can take to mitigate the impact. Based on these assessments, and given the measures that could be undertaken to mitigate the current adverse conditions, together with the current resources available, the directors have concluded that they can continue to adopt the going concern basis in preparing the financial statements.

Turnover

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

Revenue from work in progress is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2019, is being amortised evenly over its estimated useful life of five years.

Tangible fixed assets

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

Freehold land and buildings

not depreciated

Leasehold improvements

7%, 10% or 20% on cost

Plant and machinery

5%, 10% , 20% or 25% on cost

Fixtures, fittings & equipment

10% or 25% on cost

Motor vehicles

10%, 20% or 25% on cost

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

The directors consider that the freehold property is maintained in such a state of repair that the residual value is at least equal to the net book value. As a result, the corresponding depreciation would not be material and therefore is not charged in the profit and loss account.

No depreciation is provided in respect of freehold land.

Investments in subsidiaries

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

Stocks

Material stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and those overheads that have been incurred in bringing the stocks to their present location and condition.

Labour work-in-progress is valued at selling value in accordance with the accounting policy for revenue recognition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stock over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Taxation

Taxation for the year 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 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.

Hire purchase and leasing commitments

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

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.

Short term employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.