The directors present the strategic report for the year ended 30 September 2020.
2020 and the pandemic has resulted in the R&V Group having one of the most challenging years it has ever had. During the first lockdown in 2020, the R&V factories ceased production for staff safety and due to all major suppliers also shutting down. When the first lockdown was lifted towards the end of May 2020, it was assumed that the recovery would be a “slow burn”. However, the break in production resulted in the group initially being unable to satisfy demand, with a large build up in orders as a result of restrictions on Europlas’ trade customers installing windows and doors, continued ordering through the Europlas branches for the best part of two months with no associated production, Increasing demand from the homebuilders, alongside some of the key machinery undergoing maintenance and reconditioning.
In addition to our own internal operational challenges the supply chain was being stretched. Initially, during June, July and the first weeks of August R&V was okay, enjoying preferred partner status with our main suppliers. This was possible due to our supplier relationships and exemplary payment performance, before and during lockdown. However as suppliers were finding it increasingly difficult to secure materials, shortages became regular occurrences.
The pressure on the supply chain inevitably led to non-negotiable increased costs which we had no alternative but to pass on, immediately to Europlas, and attempting a phased increase on contracts with house builders that have been running for twelve months or more.
We are and have been in a better position than most in our industry, largely due to the close, professional and respectful relationships we have with our suppliers and customers. To mitigate some of the difficulties encountered, we have streamlined production in Tredegar with the introduction of an eight head welder (capable of producing 25 frames per hour), changed the system used to process work for both factories, stopped overtime and ceased the evening shift in Tredegar.
As expected turnover is down (no production at the end of March, all of April and most of May) on last year £12,352,678 (2019 £14,496,992), however given the mitigation measures employed, pre-tax profits were not impacted to the same degree, being £1,136,102 (2019 £1,016,168).
Europlas pressed ahead with the expansion strategy, signing a lease on another new outlet in Caerphilly in July, which opened its doors in December and its already making a contribution to overhead.
The Composite Door Project was put on hold during the pandemic, but as restrictions in Wales now begin to lift it will gain traction and we are confident that we will have all testing complete and be in production before the end of the 2021 financial year.
The directors are pleased with the results and are confident that the decisions taken will aid the path back to growth and the success of the business.
The Group’s plan to extend its geographical reach has worked well and it now services the two new trade counters in South Wales and four new national house builders in the South West from the operation in Tredegar.
The directors are pleased with the results and are confident that decisions taken will aid the continued stability and success of the business.
With the vaccine rollout appearing to make a major contribution to containing the virus, there are still regular news reports about new strains that may be more infectious and have the ability to spread faster and more easily. Until we return to “normal” activities, the group will continue to adopt a conservative approach to business. There are no plans to open other Europlas trade counters in the coming year and the strategy is to focus on cost savings and efficiencies, continue to build cash reserves and shore up the balance sheet.
Raw material prices are extremely volatile and this is unlikely to change (with surcharges being the most recent order of the day) until we see a drop in demand, which may be facilitated by further lifting of restrictions, resulting in the public spending money on things other than home improvements, such as foreign holidays, weddings, high street shopping etc.
Neither Brexit nor Covid-19, so far, appear to have affected house builders' appetite to plough ahead and build apace, and house prices are soaring, despite suffering materials and skills shortages.
As stated earlier the composite door project was postponed due to pressure on production of PVCu products. However this has now been resurrected and the Production Director has been charged with driving the project forward. The marketing of the composite doors will lean heavily on security and the route to market will, initially be through the Europlas’ trade counters.
The Group will invest in replacing a number of vans this year taking advantage of the increased annual investment allowance of 130%, announced at the last budget.
Consolidation will be the approach in the coming year with a focus on the existing customer base and opportunities for organic growth.
Delivery of the group’s strategic objectives is monitored periodically by the directors using the following key performance indicators:
Management Accounts
Order Book Value
Turnover
Cashflow
Operating Profit
Cash Reserves
Capital Expenditure
Customer and Staff Retention
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 September 2020.
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £174,750. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
In accordance with the company's articles, a resolution proposing that McLintocks (NW) Limited be reappointed as auditor of the group will be put at a General Meeting.
We have audited the financial statements of Rooms & Views Manufacturing Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2020 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 and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
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 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
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's or the parent company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue .
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit :
the information given in the strategic report and the directors' r eport for the financial year for which the financial statements are prepared is consistent with the financial statements ; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identifie d material misstatements in the strategic report and the directors' r eport .
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the directors' r esponsibilities s tatement, 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 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 directors are 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 directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
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.
A further description of our responsibilities for the audit of the financial statements is located 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.
As permitted by s408 Companies Act 2006, the c ompany has not presented its own profit and loss account and related notes. The c ompany’s profit for the year was £282,895 (2019 - £731,483 profit).
Rooms & Views Manufacturing Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Units 2 & 3, Catheralls Industrial Estate, Pinfold Lane, Buckley, Flintshire, CH7 3PS.
The group consists of Rooms & Views Manufacturing Ltd and all of its subsidiaries.
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 a mounts 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:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 33 ‘Related Party Disclosures’ : Compensation for key management personnel .
The consolidated group financial statements consist of the financial statements of the parent company Rooms & Views Manufacturing Ltd together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates .
All financial statements are made up to 30 September 2020 . 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 g roup.
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.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future , despite the COVID-19 pandemic . Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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.
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.
Equity in vest ments 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.
I n the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities 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.
At each reporting period end date, the group 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.
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.
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, 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 m ethod 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.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
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.
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.
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 paymen ts 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.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value th r ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
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.
The tax expense represents the sum of the tax currently payable and deferred 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 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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 lease d asset are consumed.
Government grants are recognised at the fair value of the asset receive d or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met . Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable . A grant received before the recognition criteria are satisfied is recognised as a liability.
Retentions
Retentions on sales are recognised in the financial statements when the group and company are virtually certain that there will be receipt of income. Retentions are provided for against sales in the period in which they arise and are re-instated in the period they are received.
In the application of the group’s accounting policies, the directors are 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.
Other significant income - grants received
Grant income received includes income of £505,417 in Welsh Government coronavirus business support grants and £278,462 of coronavirus job retention scheme support grants which the company was entitled to as a result of the COVID-19 pandemic.
The average monthly number of persons employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2019 - 4).
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:
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:
The carrying value of land and buildings comprises:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Freehold property with a carrying amount of £510,000 w as revalued at the year end by BA Commercial Chartered Surveyors, who are not connected with the company , on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties.
No depreciation is charged on the freehold properties as they are recorded at valuation which the directors see as a true and fair value at 30 September 2020.
The revaluation surplus is disclosed in note 29.
The following asse t s are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:
Group
Investment property in the group represents the buy to let properties in the company (see below). Upon consolidation the Tredegar property is reflected in freehold property as this is used by the group.
Company
The investment property brought forward comprises of a factory unit and warehouse in Tredegar, on which market rate rent is payable by Rooms & Views Manufacturing (South Wales & West) Limited. The Tredegar factory has an associated mortgage provided by the The Royal Bank of Scotland plc. Also included in investment property brought forward is a buy to let property in Norwich. This was disposed of during the year. During the year, the company purchased a buy to let property in Glasgow.
The fair value of the warehouse in Tredegar has been arrived at on the basis of a valuation carried out by valuers Bruton Knowles, who are not connected to the company, on 15 March 2020. The property was valued on an open market value basis by reference to market evidence of transaction prices for similar properties. The directors consider that the valuation of the property remained unchanged at 30 September 2020. Had it been accounted for at historic cost the carrying value of the property would have been £307,521 (2019: £307,521).
The fair value of the buy to let property has been arrived at based on the purchase price paid on 17 September 2020. The directors consider that the valuation of the property remained unchanged at 30 September 2020.
Details of the company's subsidiaries at 30 September 2020 are as follows:
Registered office addresses (all UK unless otherwise indicated):
As permitted by the reduced disclosure framework within FRS 102, the company has taken advantage of the exemption from disclosing the carrying amount of certain classes of financial instruments , denoted by ' n/a ' above .
There is a debenture registered against the company, created 21 February 2012, held by The Royal Bank of Scotland plc, with fixed and floating charges against all assets of the company present and future.
The outstanding mortgage loan provided by The Royal Bank of Scotland plc is secured by a fixed charge registered on 17 February 2014 over the freehold property at Ashvale Industrial Estate, Tredegar.
The mortgage provided by The Royal Bank of Scotland plc in respect of the buy to let property of 77 Cottinghams Drive, Norwich was repaid in December 2019 upon the sale of the property. As a result the associated legal charge was satisfied on 28 December 2019.
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. 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 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The warranty provision represents the estimated liability the two Rooms & Views manufacturing companies have against faulty manufacture or installation of PVCu windows. The warranty is extended for a 2 year period from the point of sale.
Provisions are classified based on the amounts that are expected to be settled within the next 12 months - 2020: £29,007 (2019: £23,274), or more than 12 months - 2020: £22,563 (2019: £29,007).
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
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.
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:
The remuneration of key management personnel is as follows.
Included in the total remuneration of key management personnel is £nil for compensation for loss of office (2019:14,000).
At 30th September 2020 the group was owed £10,405 (201 9 : £10,405) by one of its subsidiaries' directors.
Dividends totalling £174,500 (2019 - £152,000) were paid in the year in respect of shares held by the company's directors. In addition, dividends totalling £4,000 (2019: £nil) were paid to the directors of the group's subsidiaries.
The ultimate controlling party of Rooms & Views Manufacturing Limited is K M McClure.
The group's fixed assets have been restated to reflect the fact that the factory in South Wales is a freehold asset for the purpose of the group accounts, whereas it is an investment property in the company accounts - as previously reported. This has also resulted in the non-distributable reserve associated with the investment asset being re-classified to a revaluation reserve for the tangible fixed asset. Overall there is no change in the group's reserves figure.