Bullet Express Limited - Limited company accounts 20.1

REGISTERED NUMBER: SC203638 (Scotland)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2021

FOR

BULLET EXPRESS LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Statement of Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

11

Cash Flow Statement

12

Notes to the Cash Flow Statement

13

Notes to the Financial Statements

14

DIRECTORS:

D J McCutcheon

G R Smith

Mrs B M Mackay

W Heron

G J Simpson

J McKail

REGISTERED OFFICE:

6th Floor, Gordon Chambers

90 Mitchell Street

Glasgow

G1 3NQ

REGISTERED NUMBER:

SC203638 (Scotland)

AUDITORS:

Cornerstone Accountants, Statutory Auditor

6th Floor

Gordon Chambers

90 Mitchell Street

Glasgow

G1 3NQ

The directors present their strategic report for the year ended 31 March 2021.

REVIEW OF BUSINESS

Operating Review

Turnover reduced as a direct result of COVID disruption to the wider business environment, with many sectors of business downtrading, or closing for sizeable periods of time. In spite of these disruptions, the current financial year gross and net margin percentage levels were maintained and are broadly in line with directors' expectations. The company's pricing policy and ability to meet the diverse demands of its customer market gives the directors confidence in their expectations of future growth in turnover and an improvement in gross and net margins. As the country eases out of lockdown, the company has recently secured major accounts of blue chip quality which it believes will add to the continued growth.

PRINCIPAL RISKS AND UNCERTAINTIES

Financial Risk Management

The company monitors working capital management strictly. No hedging of interest rate movements is considered appropriate and the company has little direct exposure to movements in foreign currencies. The directors consider that the financial controls in place are more than adequate for management of financial risks.

Competitive Risk Assessment

The company operates in a competitive environment, however, the directors believe that through its continued effort to diversify and its reliance on key competencies, the business is well placed to continue expanding. The company has aligned a full portfolio of services to connect global supply chains for a wide range of customers including air, sea, road, intercontinental rail, in-house customs clearance, complimented with storage logistics and a range of final mile transportation solutions. This full range of services has helped to push the business forward during the COVID-19 pandemic, blending asset and non-asset logistics solutions, to provide an edge over competitors.

FINANCIAL KEY PERFORMANCE INDICATORS

The directors use KPI's to measure return on capital employed as well as gross and net profit margins along with other financial/departmental KPI's to monitor the company's development and performance during the year as well as financial position at year end. The KPI's are cascaded through each trading department and are in line with management expectations throughout the business.

FUTURE PROSPECTS

Despite COVID-19 disruptions to the general economy, the business quickly recovered from early lockdown volumes drop and the outlook for the company for 2021/22 remains encouraging, with trading to date ahead of expectations. To elevate strategic developments and future growth, the company appointed a new Managing Director in March 2020 to drive the business forward into new areas. Investments in International Freight Forwarding Services and Customs House Brokerage, including the launch of Bullet Express Customs Care, positioned the company very well in preparation for Brexit transitioning. With diverse income streams from Express Network Operations, Non-Network Services (concentrated around Special Services), Aerospace Logistics, Storage and Worldwide Freight Forwarding, all continue to perform well. Storage logistics demand exceeded expectations and is earmarked for further development into the next financial year. The Directors consider that the company is very well placed to meet available opportunities for growth within its chosen target markets for the foreseeable future.

ON BEHALF OF THE BOARD:

D J McCutcheon - Director

27 October 2021

The directors present their report with the financial statements of the company for the year ended 31 March 2021.

DIVIDENDS

The total distribution of dividends for the year ended 31 March 2021 was £186,517 (2020: £345,089).

DIRECTORS

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

D J McCutcheon

G R Smith

Mrs B M Mackay

W Heron

G J Simpson

J McKail

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

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

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

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

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

AUDITORS

The auditors, Cornerstone Accountants, Statutory Auditor, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

D J McCutcheon - Director

27 October 2021

Opinion

We have audited the financial statements of Bullet Express Limited (the 'company') for the year ended 31 March 2021 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 March 2021 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.

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 three, 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:

As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control.

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

- Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the company to cease to continue as a going concern.

- Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

- Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the company audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear upon our independence, and where applicable, related safeguards.

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.

Brian Thomson BA (Hons) CA (Senior Statutory Auditor)

for and on behalf of Cornerstone Accountants, Statutory Auditor

6th Floor

Gordon Chambers

90 Mitchell Street

Glasgow

G1 3NQ

27 October 2021

TURNOVER

12,022,226

13,899,798

Cost of sales

8,397,433

9,703,205

GROSS PROFIT

3,624,793

4,196,593

Administrative expenses

3,126,931

3,079,539

497,862

1,117,054

Other operating income

307,686

12,750

OPERATING PROFIT

5

805,548

1,129,804

Interest receivable and similar income

696

4,123

806,244

1,133,927

Interest payable and similar expenses

6

30

17,991

PROFIT BEFORE TAXATION

806,214

1,115,936

Tax on profit

7

163,190

303,579

PROFIT FOR THE FINANCIAL YEAR

643,024

812,357

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

643,024

812,357

FIXED ASSETS

Intangible assets

9

-

-

Tangible assets

10

260,383

311,628

Investments

11

125,000

75,000

385,383

386,628

CURRENT ASSETS

Stocks

12

15,110

-

Debtors

13

3,902,175

3,628,968

Cash at bank and in hand

3,189,035

1,007,967

7,106,320

4,636,935

CREDITORS

Amounts falling due within one year

14

2,620,443

2,392,704

NET CURRENT ASSETS

4,485,877

2,244,231

TOTAL ASSETS LESS CURRENT LIABILITIES

4,871,260

2,630,859

CREDITORS

Amounts falling due after more than one year

15

(1,806,187

)

-

PROVISIONS FOR LIABILITIES

18

(29,448

)

(43,210

)

NET ASSETS

3,035,625

2,587,649

CAPITAL AND RESERVES

Called up share capital

19

1,007

1,007

Retained earnings

3,034,618

2,586,642

SHAREHOLDERS' FUNDS

3,035,625

2,587,649

The financial statements were approved and authorised for issue by the Board of Directors and authorised for issue on 27 October 2021 and were signed on its behalf by:

D J McCutcheon - Director

Mrs B M Mackay - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 April 2019

1,007

2,119,374

2,120,381

Changes in equity

Dividends

-

(345,089

)

(345,089

)

Total comprehensive income

-

812,357

812,357

Balance at 31 March 2020

1,007

2,586,642

2,587,649

Changes in equity

Dividends

-

(195,048

)

(195,048

)

Total comprehensive income

-

643,024

643,024

Balance at 31 March 2021

1,007

3,034,618

3,035,625

Cash flows from operating activities

Cash generated from operations

1

1,209,082

543,665

Interest paid

(30

)

(17,991

)

Tax paid

(203,271

)

58,756

Net cash from operating activities

1,005,781

584,430

Cash flows from investing activities

Purchase of tangible fixed assets

(67,910

)

(272,189

)

Purchase of fixed asset investments

(50,000

)

(75,000

)

Sale of tangible fixed assets

408

-

Interest received

696

4,123

Net cash from investing activities

(116,806

)

(343,066

)

Cash flows from financing activities

New loans in year

2,000,000

-

Loan repayments in year

-

(350,000

)

Amount introduced by directors

-

182,310

Amount withdrawn by directors

-

(170,538

)

Amounts advance to related undertakings

(512,859

)

-

Equity dividends paid

(195,048

)

(345,089

)

Net cash from financing activities

1,292,093

(683,317

)

Increase/(decrease) in cash and cash equivalents

2,181,068

(441,953

)

Cash and cash equivalents at beginning of year

2

1,007,967

1,449,920

Cash and cash equivalents at end of year

2

3,189,035

1,007,967

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

2021

2020

£

£

Profit before taxation

806,214

1,115,936

Depreciation charges

118,746

102,834

Finance costs

30

17,991

Finance income

(696

)

(4,123

)

924,294

1,232,638

Increase in stocks

(15,110

)

-

Decrease in trade and other debtors

239,653

10,978

Increase/(decrease) in trade and other creditors

60,245

(699,951

)

Cash generated from operations

1,209,082

543,665

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 March 2021

31.3.21

1.4.20

£

£

Cash and cash equivalents

3,189,035

1,007,967

Year ended 31 March 2020

31.3.20

1.4.19

£

£

Cash and cash equivalents

1,007,967

1,449,920

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.4.20

Cash flow

At 31.3.21

£

£

£

Net cash

Cash at bank and in hand

1,007,967

2,181,068

3,189,035

1,007,967

2,181,068

3,189,035

Debt

Debts falling due within 1 year

-

(193,813

)

(193,813

)

Debts falling due after 1 year

-

(1,806,187

)

(1,806,187

)

-

(2,000,000

)

(2,000,000

)

Total

1,007,967

181,068

1,189,035

1.	STATUTORY INFORMATION

Bullet Express Limited is a private company, limited by shares , registered in Scotland. 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" ("FRS 102") and the requirements of the Companies Act 2006.

The financial statements are presented in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies are set out below.

Preparation of consolidated financial statements

The financial statements present information about the company as an individual undertaking and not about its group. The company has not prepared group financial statements as it is exempt from the requirement to do so by section 405 of the Companies Act 2006 on the basis that its subsidiary undertaking is dormant and so is not material for the purpose of giving a true and fair view.

Significant judgements and estimates

In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying value 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 in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on the financial statements.

Accruals

As part of the month and year end process, management are required to estimate requirements for accruals. These estimates are arrived at based on their knowledge of the business coupled with post year end information identifying expenses incurred relating to the previous financial period.

Bad debt provision

The year end debtors are assessed by management to identify any specific customers or balances where recoverability issues exist.

Turnover

Turnover represents net invoices sales of services in the year, excluding value added tax, and is recognised on the provision on those services.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2006, is being amortised evenly over its estimated useful life of thirteen years.

At the date of acquisition of a business in 2006, management were required to make a judgement based on their knowledge of the business regarding the useful economic life of goodwill. This was determined to be 13 years and management continue to review this assumption and are satisfied that 13 years remains appropriate.

Tangible fixed assets

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

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

Plant and machinery

- 25% on a straight line basis

Fixtures and fittings

- 33% on a straight line basis

Motor vehicles

- 25% on a straight line basis

Computer equipment

- 33% on a straight line basis

Impairment of fixed assets

At each reporting end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Government grants

Government grants in relation to tangible fixed asset are credited to profit and loss account over the useful lives of the related assets, whereas those in relation to expenditure are credited when the expenditure is charged to profit and loss.

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extend that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

Leasing commitments

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

Foreign currencies

Income and expenditure in foreign currencies is converted to Sterling at rates approximating to those ruling at the date of each transaction. Assets and liabilities denominated in foreign currencies are translated into Sterling at the rates ruling at the balance sheet date.

Financial instruments

The company has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

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.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company's contractual obligations expire or are discharged or cancelled.

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 the profit and loss account in the period to which they relate.

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.

Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

3.	EMPLOYEES AND DIRECTORS

2021

2020

£

£

Wages and salaries

1,755,987

1,701,305

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

2021

2020

Full & part time staff

110

111

4.	DIRECTORS' EMOLUMENTS

2021

2020

£

£

Directors' remuneration

349,815

327,550

Contributions to a defined contribution pension scheme

14,093

11,210

363,908

338,760

Retirement benefits are accruing to 2 (2020 - 2) directors.

The directors of the company are key management personnel.

5.	OPERATING PROFIT

The operating profit is stated after charging:

2021

2020

£

£

Hire of plant and machinery

68,526

61,772

Depreciation - owned assets

118,747

102,835

Auditors' remuneration

10,935

8,000

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

2021

2020

£

£

Loan interest paid

30

17,991

7.

TAXATION

Analysis of the tax charge

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

2021

2020

£

£

Current tax:

UK corporation tax

176,952

203,271

Adjustment in respect of prior

periods

-

72,215

Total current tax

176,952

275,486

Deferred tax

(13,762

)

28,093

Tax on profit

163,190

303,579

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:

2021

2020

£

£

Profit before tax

806,214

1,115,936

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2020 - 19%)

153,181

212,028

Effects of:

Expenses not deductible for tax purposes

18,191

23,541

Capital allowances in excess of depreciation

-

(32,297

)

Depreciation in excess of capital allowances

5,580

-

Adjustments to tax charge in respect of previous periods

-

72,215

Deferred tax movement

(13,762

)

28,092

Total tax charge

163,190

303,579