Procter Johnson Holdings Limited
Annual report and Financial Statements
For the year ended 31 December 2021
Procter Johnson Holdings Limited
Company information
Director
Mr H R Jackson
Company number
12023726
Registered office
The Glades
Festival Way
Festival Park
Stoke-on-Trent
Staffordshire
United Kingdom
ST1 5TQ
Auditor
Mitten Clarke Audit Limited
The Glades
Festival Way
Festival Park
Stoke on Trent
Staffordshire
ST1 5SQ
Procter Johnson Holdings Limited
Contents
Page
Strategic report
1 - 2
Director's report
3 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Group statement of comprehensive income
9
Group balance sheet
10
Company balance sheet
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Notes to the financial statements
15 - 33
Procter Johnson Holdings Limited
Strategic report
For the year ended 31 December 2021
- 1 -

The director presents the strategic report for the year ended 31 December 2021.

Fair review of the business

Construction in the UK has been very buoyant during 2021 and in turn demand for our products has been high. There has been massive pressure on availability of raw materials and prices have increased dramatically, which has seen a 45% increase in revenues. This was an overall 22% increase on the forecasted revenue.

Gross profit margins have remained strong at 22.6%, compared to 22.1% in the prior year.

Administration costs have increased over the period as a result of various nationwide struggles, with increases in fuel prices, insurance premiums and haulage costs causing inflationary increases.

Sea freight from the Far East has also been a critical factor that has affected import costs severely.

Net profit margins before tax increased by 1.5% from 7.7% in the prior period up to 9.2% in the current year.

 

The group received funding of £1.25m from the Coronavirus Business Interruption Loan Scheme in April 2020. The CBILS loan was paid back in full in March 2021.

 

Covid was less problematic towards business operations in 2021. We continue to maintain sensible Covid protocol, whilst staff working from home returned to the office in September 2021.

 

The group continues to be audited to the following health & safety, quality and environmental standards, ISO45001, ISO9001 & ISO14001.

Principal risks and uncertainties

Although most of the Covid 19 restrictions have been lifted, we continue to follow the latest government advice in order to keep the workplace a safe environment for employees, contractors and visitors.

 

Price risk

The group operates in a highly competitive industry, which is subject to price pressure from both local and overseas competition. There has been a major pressure on the cost of raw material, freight & energy throughout 2021, with the conflict in the Ukraine further exacerbating the situation. The labour market continues to be challenging and this has forced rates upwards.

Whilst demand for housing is still outstripping supply, inflation and the cost of living crisis would indicate that there could be a cooling of the economy in late 2022, which could impact demand for our products. It’s likely that prices would reduce and that revenues follow the same trend.

 

Financial instrument risk

The business is exposed to the risk that financial instruments held by the group impact on its ability to operate effectively and profitably. The risks which are relevant to the group's operations are:

 

Currency risk

The group purchases many of its raw materials from overseas suppliers and as such, is often exposed to fluctuations in foreign exchange rates. The board reviews the impact movements in foreign exchange has on both imports and exports on an ongoing basis.

 

Credit risks

The group makes regular sales to existing customers which is considered to reduce credit risk. Policies are in place to ensure that provisions for bad debts are made when considered necessary.

 

Cashflow risks

The group carefully manages its stock holding and debtor book to ensure that sufficient cash is available to meet operational need. The group holds adequate cash balances and so it is not considered that cashflow issues are a significant risk to the group.

 

Liquidity risks

The group funds its working capital need through the generation and retention of profits. Management is confident that additional bank funding facilities would be available, should it be required, to fund working capital, further investment or any future expansion plans.

Procter Johnson Holdings Limited
Strategic report (continued)
For the year ended 31 December 2021
- 2 -
Development and performance

The group expects a higher level of activity in terms of revenue and volume for the year 2022, although there may be some cooling in Q4 as the government try and put the brakes on inflation

The group purchased a new 10 acre site in August 2021 and is looking to relocate the business by Q2 2023. The new site will not only allow for expansion and investment in existing business lines, but will allow the group to diversify into the production of new products and new areas of research.

Key performance indicators

The board monitors progress of the group using the following KPIs:

 

Revenue

 

2021                2020    

Revenue        £19,336,039            £13,350,061

Increase %        44.8                381.5

 

This KPI is calculated by taking the turnover and other operating income for the year. This is compared to the previous year and movement is shown as a percentage

 

Operating Profit

 

            2021                 2020

Operating Profit        £1,838,489            £1,076,383

% of revenue        9.5                8.1

 

This KPI is calculated by taking the total revenue and deducting, the cost of sales, distribution costs and administrative expenses.

On behalf of the board

Mr H R Jackson
Director
25 August 2022
Procter Johnson Holdings Limited
Director's report
For the year ended 31 December 2021
- 3 -

The director presents his annual report and financial statements for the year ended 31 December 2021.

Principal activities

The principal activity of the company in the period under review was that of a holding company.

 

The principal activity of the subsidiary undertaking is as follows:

 

P J Colours Limited - the manufacture and sale of pigments and additives to the concrete and asphalt industries.

 

P J Colours Holdings Limited - a dormant company.

 

Picasso Holdings Limited - a dormant company.

Results and dividends

The results for the year are set out on page 32.

Ordinary dividends were paid amounting to £170,000. The director does not recommend payment of a further dividend.

Director

The director who held office during the year and up to the date of signature of the financial statements was as follows:

Mr H R Jackson
Research and development

The group invested in research and development in the year relating to product development.

Post reporting date events

Information relating to events since the end of the year is given in the notes to the financial statements.

Auditor

Mitten Clarke Audit Limited, has indicated its willingness to continue in office and will be proposed for re-appointment in accordance with section 485 Companies Act 2006.

Procter Johnson Holdings Limited
Director's report (continued)
For the year ended 31 December 2021
- 4 -
Statement of director's responsibilities

The director is responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the director is required to:

 

 

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

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

Disclosure in the strategic report

The company has chosen in accordance with section 414C(11) of Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 set out in company's Strategic Report information required by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.

On behalf of the board
Mr H R Jackson
Director
25 August 2022
Procter Johnson Holdings Limited
Independent auditor's report
To the members of Procter Johnson Holdings Limited
- 5 -
Opinion

We have audited the financial statements of Procter Johnson Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2021 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including 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:

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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 director's 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 group's and parent 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 director with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. 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. 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 course of 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.

Procter Johnson Holdings Limited
Independent auditor's report (continued)
To the members of Procter Johnson Holdings Limited
- 6 -

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

 

Responsibilities of director

As explained more fully in the director's responsibilities statement, the director is 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 director determines is 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 director is responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the parent company or to cease operations, or has no realistic alternative but to do so.

Auditor's 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 an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

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 parent company and group through discussions with directors and other management;

- 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 parent company and group, including legislation such as the Companies Act 2006, taxation legislation, data protection, employment, and health and safety legislation;

- we assessed the extent of compliance with the laws and regulations through making enquiries of management and reviewing legal and professional fee invoices.

Procter Johnson Holdings Limited
Independent auditor's report (continued)
To the members of Procter Johnson Holdings Limited
- 7 -

We assessed the susceptibility of the group 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

- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

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 posted during the period and at the period end to identify unusual transactions;

- investigated the rationale behind significant or unusual transactions; and

- performed walkthrough tests on major transaction cycles.

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

- reviewing legal and professional fees incurred during the period to identify any potential indications of non-compliance with laws and regulations.

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.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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 an auditor's report 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.

The Glades
Lindsey Shepherd
Festival Way
(Senior Statutory Auditor)
Festival Park
for and on behalf of
Stoke on Trent
Mitten Clarke Audit Limited
ST1 5SQ
Chartered Accountants
31 August 2022
Statutory Auditor
Procter Johnson Holdings Limited
Group profit and loss account
For the year ended 31 December 2021
- 8 -
2021
2020
Notes
£
£
Turnover
3
19,336,039
13,350,061
Cost of sales
(14,962,522)
(10,393,734)
Gross profit
4,373,517
2,956,327
Distribution costs
(820,934)
(599,185)
Administrative expenses
(1,721,822)
(1,506,943)
Other operating income
7,728
226,184
Operating profit
4
1,838,489
1,076,383
Interest receivable and similar income
8
411
1,296
Interest payable and similar expenses
9
(50,958)
(53,264)
Profit before taxation
1,787,942
1,024,415
Tax on profit
10
(292,751)
(193,029)
Profit for the financial year
25
1,495,191
831,386
Profit for the financial year is all attributable to the owners of the parent company.
Procter Johnson Holdings Limited
Group statement of comprehensive income
For the year ended 31 December 2021
- 9 -
2021
2020
£
£
Profit for the year
1,495,191
831,386
Other comprehensive income
Revaluation of tangible fixed assets
-
0
12,378
Total comprehensive income for the year
1,495,191
843,764
Total comprehensive income for the year is all attributable to the owners of the parent company.
Procter Johnson Holdings Limited
Group balance sheet
As at 31 December 2021
31 December 2021
- 10 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
13
2,795,486
577,370
Current assets
Stocks
16
1,765,470
1,286,855
Debtors
17
5,464,765
3,012,115
Cash at bank and in hand
422,951
1,785,440
7,653,186
6,084,410
Creditors: amounts falling due within one year
18
(5,068,716)
(4,189,510)
Net current assets
2,584,470
1,894,900
Total assets less current liabilities
5,379,956
2,472,270
Creditors: amounts falling due after more than one year
19
(2,146,104)
(562,467)
Provisions for liabilities
Deferred tax liability
22
17,958
50,000
(17,958)
(50,000)
Net assets
3,215,894
1,859,803
Capital and reserves
Called up share capital
24
1,111,120
1,111,120
Revaluation reserve
12,378
12,378
Profit and loss reserves
25
2,092,396
736,305
Total equity
3,215,894
1,859,803
The financial statements were approved and signed by the director and authorised for issue on 25 August 2022
25 August 2022
Mr H R Jackson
Director
Procter Johnson Holdings Limited
Company balance sheet
As at 31 December 2021
31 December 2021
- 11 -
2021
2020
Notes
£
£
£
£
Fixed assets
Investment properties
14
2,600,575
-
0
Investments
15
2,233,341
2,233,341
4,833,916
2,233,341
Current assets
Debtors
17
442,282
-
0
Cash at bank and in hand
83
20
442,365
20
Creditors: amounts falling due within one year
18
(641,013)
(192,101)
Net current liabilities
(198,648)
(192,081)
Total assets less current liabilities
4,635,268
2,041,260
Creditors: amounts falling due after more than one year
19
(2,046,064)
(570,468)
Net assets
2,589,204
1,470,792
Capital and reserves
Called up share capital
24
1,111,120
1,111,120
Profit and loss reserves
25
1,478,084
359,672
Total equity
2,589,204
1,470,792

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £1,288,413 (2020 - £513,748 profit).

The financial statements were approved and signed by the director and authorised for issue on 25 August 2022
25 August 2022
Mr H R Jackson
Director
Company Registration No. 12023726
Procter Johnson Holdings Limited
Group statement of changes in equity
For the year ended 31 December 2021
- 12 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2020
1,111,120
-
74,919
1,186,039
Year ended 31 December 2020:
Profit for the year
-
-
831,386
831,386
Other comprehensive income:
Revaluation of tangible fixed assets
-
12,378
-
12,378
Total comprehensive income for the year
-
12,378
831,386
843,764
Dividends
12
-
-
(170,000)
(170,000)
Balance at 31 December 2020
1,111,120
12,378
736,305
1,859,803
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
1,495,191
1,495,191
Dividends
12
-
-
(170,000)
(170,000)
Transfers
-
-
30,900
30,900
Balance at 31 December 2021
1,111,120
12,378
2,092,396
3,215,894
Procter Johnson Holdings Limited
Company statement of changes in equity
For the year ended 31 December 2021
- 13 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2020
1,111,120
15,924
1,127,044
Year ended 31 December 2020:
Profit and total comprehensive income for the year
-
513,748
513,748
Dividends
12
-
(170,000)
(170,000)
Balance at 31 December 2020
1,111,120
359,672
1,470,792
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
1,288,412
1,288,412
Dividends
12
-
(170,000)
(170,000)
Balance at 31 December 2021
1,111,120
1,478,084
2,589,204
Procter Johnson Holdings Limited
Group statement of cash flows
For the year ended 31 December 2021
- 14 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
31
(840,892)
2,025,508
Interest paid
(50,958)
(53,264)
Income taxes paid
(113,408)
(474,666)
Net cash (outflow)/inflow from operating activities
(1,005,258)
1,497,578
Investing activities
Purchase of tangible fixed assets
(2,250,745)
(54,587)
Interest received
411
1,296
Net cash used in investing activities
(2,250,334)
(53,291)
Financing activities
Proceeds from borrowings
-
1,375,000
Repayment of borrowings
669,802
(786,726)
Repayment of bank loans
1,403,310
(229,831)
Payment of finance leases obligations
(10,009)
-
Dividends paid to equity shareholders
(170,000)
(170,000)
Net cash generated from financing activities
1,893,103
188,443
Net (decrease)/increase in cash and cash equivalents
(1,362,489)
1,632,730
Cash and cash equivalents at beginning of year
1,785,440
152,710
Cash and cash equivalents at end of year
422,951
1,785,440
Procter Johnson Holdings Limited
Notes to the group financial statements
For the year ended 31 December 2021
- 15 -
1
Accounting policies
Company information

Procter Johnson Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is The Glades, Festival Way, Festival Park, Stoke-on-Trent, Staffordshire, United Kingdom, ST1 5TQ.

 

The group consists of Procter Johnson Holdings Limited and its subsidiaries.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 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 prepared 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 modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

 

1.2
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Procter Johnson Holdings Limited together with all entities controlled by the parent company (its subsidiaries).

 

All financial statements are made up to 31 December 2021. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

Procter Johnson Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies
(Continued)
- 16 -
1.3
Going concern

At the time of approving the financial statements, the director has a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

1.4
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.5
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.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold land and buildings
Straight line over 30 years
Plant and equipment
33.33% , 20% and 10% on cost
Fixtures and fittings
25% on cost
Motor vehicles
33.33% on cost and 25% on reducing balance

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 recognised in the profit and loss account.

Properties whose fair value can be measured reliably are held under the revaluation model and are carried at a revalued amount, being their fair value at the date of valuation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The fair value of the land and buildings is usually considered to be their market value.

 

Revaluation gains and losses are recognised in other comprehensive income and accumulated in equity, except to the extent that a revaluation gain reverses a revaluation loss previously recognised in profit or loss or a revaluation loss exceeds the accumulated revaluation gains recognised in equity; such gains and loss are recognised in profit or loss.

 

1.6
Investment properties

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

 

Property rented to a group entity is accounted for at fair value with changes in fair value recognised in profit or loss.

Procter Johnson Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies
(Continued)
- 17 -
1.7
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.8
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible 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.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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.

1.9
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined on the first-in, first-out (FIFO) method, and comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks 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.

Procter Johnson Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies
(Continued)
- 18 -
1.10
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks.

1.11
Financial instruments

The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and 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 group 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 group after deducting all of its liabilities.

Procter Johnson Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies
(Continued)
- 19 -
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies, 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 payments 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 group's contractual obligations expire or are discharged or cancelled.

1.12
Equity instruments

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

1.13
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 group’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 extent 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 if, and only if, there is 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.

Procter Johnson Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies
(Continued)
- 20 -
1.14
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.

1.15
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.16
Leases

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 leased asset are consumed.

1.17
Government grants

Government grants are recognised based on the accrual model and are measured at the fair value of the asset received or receivable. Grants are classified as relating either to revenue or to assets. Grants relating to revenue are recognised in income over the period in which the related costs are recognised.

1.18
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

1.19

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 subsidiaries within the group.

 

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

Procter Johnson Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
- 21 -
2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount 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 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 amounts recognised in the financial statements.

Property revaluation

Freehold property is measured using the revaluation model and as such requires significant judgement.

 

An external valuation has been undertaken at a date different to the year end. As such, directors judgements are required to determine the valuation of the freehold property at the year end. The directors judgements have been based on their knowledge of the freehold properties taking account of geographical locations, estimated rental values and the external valuation undertaken.

3
Turnover and other revenue
2021
2020
£
£
Turnover analysed by geographical market
United Kingdom
14,553,336
9,404,474
Rest of the world
4,782,703
3,945,587
19,336,039
13,350,061
2021
2020
£
£
Other revenue
Interest income
411
1,296
Grants received
7,728
183,661
Sundry receipts
-
42,523
Procter Johnson Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
- 22 -
4
Operating profit
2021
2020
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange losses
29,847
83,349
Government grants
(7,728)
(183,661)
Depreciation of owned tangible fixed assets
49,366
66,574
Depreciation of tangible fixed assets held under finance leases
32,900
484
Operating lease charges
39,589
136,428
5
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
7,317
6,537
For other services
Audit-related assurance services
6,650
6,650
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2021
2020
2021
2020
Number
Number
Number
Number
Directors
1
1
-
-
Employees
38
36
-
-
Total
39
37
-
0
-
0

Their aggregate remuneration comprised:

Group
Company
2021
2020
2021
2020
£
£
£
£
Wages and salaries
1,149,588
951,711
-
0
-
0
Social security costs
93,038
75,873
-
0
-
0
Pension costs
105,724
118,150
-
0
-
0
1,348,350
1,145,734
-
0
-
0
Procter Johnson Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
- 23 -
7
Director's remuneration
2021
2020
£
£
Remuneration for qualifying services
40,216
24,082
Company pension contributions to defined contribution schemes
52,000
50,000
92,216
74,082

Money purchases schemes

 

The number of directors to whom retirement benefits were accruing was 1 (2020 - 1).

 

8
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
411
631
Other interest income
-
665
Total income
411
1,296
9
Interest payable and similar expenses
2021
2020
£
£
Interest on bank overdrafts and loans
31,263
32,616
Interest on invoice finance arrangements
12,777
18,319
Other interest on financial liabilities
152
2,329
Interest on finance leases and hire purchase contracts
6,766
-
0
Total finance costs
50,958
53,264
10
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
293,893
197,929
Deferred tax
Origination and reversal of timing differences
(1,142)
(4,900)
Total tax charge
292,751
193,029
Procter Johnson Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
10
Taxation
(Continued)
- 24 -

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2021
2020
£
£
Profit before taxation
1,787,942
1,024,415
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
339,709
194,639
Tax effect of expenses that are not deductible in determining taxable profit
1,872
593
Tax effect of utilisation of tax losses not previously recognised
-
0
4
Research and development tax credit
(12,346)
-
0
Under/(over) provided in prior years
(317)
-
0
Under/over provision of DT in the year
(38,519)
(2,214)
Rounding
-
0
7
Changes in tax rates
4,310
-
0
Enhanced capital allowances (super deduction)
(1,958)
-
0
Taxation charge
292,751
193,029

Tax effects relating to effects of other comprehensive income

 

In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

 

Gain on revaluation of Freehold Property - £Nil (2020 - £12,738).

11
Individual income statement

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

12
Dividends
2021
2020
Recognised as distributions to equity holders:
£
£
Interim paid
170,000
170,000
Procter Johnson Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
- 25 -
13
Tangible fixed assets
Group
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 January 2021
395,000
103,662
61,322
98,977
658,961
Additions
2,205,575
16,165
20,557
58,085
2,300,382
At 31 December 2021
2,600,575
119,827
81,879
157,062
2,959,343
Depreciation and impairment
At 1 January 2021
-
0
46,487
28,519
6,585
81,591
Depreciation charged in the year
-
0
29,762
19,604
32,900
82,266
At 31 December 2021
-
0
76,249
48,123
39,485
163,857
Carrying amount
At 31 December 2021
2,600,575
43,578
33,756
117,577
2,795,486
At 31 December 2020
395,000
57,175
32,803
92,392
577,370
The company had no tangible fixed assets at 31 December 2021 or 31 December 2020.

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Group
Company
2021
2020
2021
2020
£
£
£
£
Motor vehicles
117,577
92,392
-
0
-
0

Tangible fixed assets with a carrying value of £461,048 (2020 - £485,068) are pledged as security for the invoice discounting facility account included in creditors.

 

Freehold property, with a carrying amount of £2,600,575 (2020 - Nil) are pledged as security against the bank loan included within creditors.

 

One of the two freehold properties was valued on 29 June 2021 by Matthews & Goodman LLP chartered surveyors and property consultants, at £395,000. The directors are of the view that there is no material difference between this valuation of the commercial property at 29 June 2021 and the fair value of freehold property held at 31 December 2021.

 

The second freehold property was purchased on 19 August 2021 for a total of £2,205,575. The directors are of the view that there is no material difference between the original cost price of this freehold property and the fair value of this property held at 31 December 2021.

The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:

Procter Johnson Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
13
Tangible fixed assets
(Continued)
- 26 -
2021
2020
£
£
Group
Cost
382,326
382,326
Accumulated depreciation
(14,349)
(8,021)
Carrying value
367,977
374,305
14
Investment property
Group
Company
2021
2021
£
£
Fair value
At 1 January 2021
-
-
Additions through external acquisition
-
2,600,575
At 31 December 2021
-
2,600,575

Investment property comprises of two properties.

 

One of the two investment properties was valued on 29 June 2021 by Matthews & Goodman LLP chartered surveyors and property consultants, at £395,000. The directors are of the view that there is no material difference between this valuation of the commercial property at 29 June 2021 and the fair value of freehold property held at 31 December 2021. This property was purchased at deemed cost on 19th August 2021 from PJ Colours Limited.

Upon consolidation, this property has been reclassified as freehold property.

 

The second investment property was purchased on 19 August 2021 for a total of £2,205,575. The directors are of the view that there is no material difference between the original cost price of this investment property and the fair value of this property held at 31 December 2021.

Upon consolidation, this property has been reclassified as freehold property.

15
Fixed asset investments
Group
Company
2021
2020
2021
2020
Notes
£
£
£
£
Investments in subsidiaries
-
0
-
0
2,233,341
2,233,341
Procter Johnson Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
15
Fixed asset investments
(Continued)
- 27 -
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2021 and 31 December 2021
2,233,341
Carrying amount
At 31 December 2021
2,233,341
At 31 December 2020
2,233,341

The group or the company's investments at the Statement of Financial Position date in the share capital of companies include the following:

 

Subsidiaries

 

PJ Colours Limited

 

Registered office: The Glades, Festival Way, Festival Park, Stoke on Trent, Staffordshire, ST1 5SQ

Nature of business: Manufacture and sale of pigments and additives.

 

Class of shares: £1 Ordinary - 100% holding

 

Picasso Holdings Limited

 

Registered office: The Glades, Festival Way, Festival Park, Stoke on Trent, Staffordshire, ST1 5SQ

Nature of business: Holding company

 

Class of shares: £1 Ordinary - 100% holding

 

PJ Colours (Holdings) Limited

 

Registered office: The Glades, Festival Way, Festival Park, Stoke on Trent, Staffordshire, ST1 5SQ

Nature of business: Holding company

 

Class of shares: £1 Ordinary - 100% holding

16
Stocks
Group
Company
2021
2020
2021
2020
£
£
£
£
Raw materials and consumables
993,198
464,437
-
0
-
0
Finished goods and goods for resale
772,272
822,418
-
0
-
0
1,765,470
1,286,855
-
0
-
0

The total carrying amount of stock of £1,765,470 (2020 - £1,286,855) is pledged as security for the invoice finance account and loans included in creditors.

Procter Johnson Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
- 28 -
17
Debtors
Group
Company
2021
2020
2021
2020
Amounts falling due within one year:
£
£
£
£
Trade debtors
4,664,638
2,866,087
-
0
-
0
Corporation tax recoverable
-
0
87,481
-
0
-
0
Amounts owed by group undertakings
-
-
32,282
-
Other debtors
427,376
17,376
410,000
-
0
Prepayments and accrued income
372,751
41,171
-
0
-
0
5,464,765
3,012,115
442,282
-
18
Creditors: amounts falling due within one year
Group
Company
2021
2020
2021
2020
Notes
£
£
£
£
Bank loans
20
490,580
791,668
448,913
-
0
Obligations under finance leases
21
15,936
5,547
-
0
-
0
Other borrowings
20
1,364,073
694,271
-
0
-
0
Trade creditors
2,354,248
2,030,714
-
0
-
0
Corporation tax payable
93,004
-
0
-
0
-
0
Other taxation and social security
380,641
165,469
-
-
Other creditors
196,116
397,287
192,100
192,101
Accruals and deferred income
174,118
104,554
-
0
-
0
5,068,716
4,189,510
641,013
192,101
19
Creditors: amounts falling due after more than one year
Group
Company
2021
2020
2021
2020
Notes
£
£
£
£
Bank loans
20
1,749,536
45,138
1,746,064
-
0
Obligations under finance leases
21
96,568
67,329
-
0
-
0
Amounts owed to group undertakings
-
0
-
0
-
0
120,468
Other creditors
300,000
450,000
300,000
450,000
2,146,104
562,467
2,046,064
570,468
Procter Johnson Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
- 29 -
20
Loans and overdrafts
Group
Company
2021
2020
2021
2020
£
£
£
£
Bank loans
2,240,116
836,806
2,194,977
-
0
Other loans
1,364,073
694,271
-
0
-
0
3,604,189
1,531,077
2,194,977
-
Payable within one year
1,854,653
1,485,939
448,913
-
0
Payable after one year
1,749,536
45,138
1,746,064
-
0

The bank loan is secured on the property purchased, along with the existing land and buildings owned by the group.

 

The invoice discounting facility (included within other loans), is secured by way of a debenture incorporating a first legal mortgage and first fixed charge over the property and other assets of the company.

21
Finance lease obligations
Group
Company
2021
2020
2021
2020
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
15,936
5,547
-
0
-
0
In two to five years
96,568
67,329
-
0
-
0
112,504
72,876
-
-

Finance lease payments represent rentals payable by the company for company motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3.5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

 

The hire purchase creditor is secured by the assets to which it relates.

Procter Johnson Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
- 30 -
22
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
2021
2020
Group
£
£
Accelerated capital allowances
17,958
19,100
Revaluations
-
30,900
17,958
50,000
The company has no deferred tax assets or liabilities.
Group
Company
2021
2021
Movements in the year:
£
£
Liability at 1 January 2021
50,000
-
Credit to profit or loss
(1,142)
-
Other
(30,900)
-
Liability at 31 December 2021
17,958
-
23
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
105,724
118,150

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

24
Share capital
Group and company
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,111,120
1,111,120
1,111,120
1,111,120

Each Ordinary share has full voting rights, the right to receive dividends and the right to participate in a capital distribution on a sale or winding up. They do not confer any rights of redemption.

Procter Johnson Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
- 31 -
25
Profit and loss reserves
Group
Company
2021
2020
2021
2020
£
£
£
£
At the beginning of the year
736,305
74,919
359,672
15,924
Profit for the year
1,495,191
831,386
1,288,412
513,748
Dividends
(170,000)
(170,000)
(170,000)
(170,000)
Transfer from revaluation reserve
30,900
-
-
-
At the end of the year
2,092,396
736,305
1,478,084
359,672

Retained earnings comprises accumulated profits less any losses and distributions which have been retained within the company. This is a distributable reserve.

 

Revaluation reserve represents gains on revaluation of property owned by the company, less any revaluation losses and provisions for deferred tax on the revaluation. This is a non-distributable reserve.

 

There is no tax arising on the movements in the revaluation reserve.

26
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2021
2020
2021
2020
£
£
£
£
Within one year
54,914
12,881
-
-
Between two and five years
145,736
7,345
-
-
200,650
20,226
-
-
27
Events after the reporting date

Since the year end, the group has entered into a facility with the bank for the funding of assets under hire purchase or asset loans for amounts up to £1.3m. This facility is to be used as and when assets require funding.

 

Since the year end, the group has increased its invoice discounting facility with the bank by £1.375m up to £4m. This facility is to be drawn down on as required.

 

Since the year end (in February 2022) both Picasso Holdings Limited and PJ Colours (Holdings) Limited have been dissolved.

Procter Johnson Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
- 32 -
28
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2021
2020
£
£
Aggregate compensation
92,216
347,670
29
Directors' transactions
Description
% Rate
Opening balance
Closing balance
£
£
Directors loan account
-
25,501
25,501
25,501
25,501

Included within other creditors are the above directors loan balances.

30
Ultimate controlling party

The controlling party is H R Jackson.

31
Cash (absorbed by)/generated from group operations
2021
2020
£
£
Profit for the year after tax
1,495,191
831,386
Adjustments for:
Taxation charged
292,751
193,029
Finance costs
50,958
53,264
Investment income
(411)
(1,296)
Depreciation and impairment of tangible fixed assets
82,266
67,058
Movements in working capital:
(Increase)/decrease in stocks
(478,615)
740,782
Increase in debtors
(2,540,131)
(196,535)
Increase in creditors
257,099
337,820
Cash (absorbed by)/generated from operations
(840,892)
2,025,508
Procter Johnson Holdings Limited
Notes to the group financial statements (continued)
For the year ended 31 December 2021
- 33 -
32
Analysis of changes in net funds/(debt) - group
1 January 2021
Cash flows
New finance leases
31 December 2021
£
£
£
£
Cash at bank and in hand
1,785,440
(1,362,489)
-
422,951
Borrowings excluding overdrafts
(1,531,077)
(2,073,112)
-
(3,604,189)
Obligations under finance leases
(72,876)
10,009
(49,637)
(112,504)
181,487
(3,425,592)
(49,637)
(3,293,742)
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