Company Registration No. 01505265 (England and Wales)
NOVA GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
NOVA GROUP LIMITED
COMPANY INFORMATION
Directors
S Felstein
I Wootton
S W Ridgard
P Corrie
Company number
01505265
Registered office
Norman Road
Altrincham
Cheshire
WA14 4EN
Auditors
Lopian Gross Barnett & Co
1st Floor Cloister House
Riverside, New Bailey Street
Manchester
M3 5FS
Business address
Norman Road
Altrincham
Cheshire
WA14 4EN
Bankers
Lloyds Bank Plc
98 Stamford New Road
Altrincham
WA14 1DG
NOVA GROUP LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 26
NOVA GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 1 -

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

Review of the business

The directors are satisfied with the results for the period and the year end balance sheet position. The company returned results in line with management expectations. The company received £52,261 (2020: £805,385) from the Coronavirus Job Retention Scheme for the year to help mitigate some of the effects on profitability.

 

The company has continued its strategy of focusing on beneficial trading activities core to the business and expects to continue to maintain its profitability in future periods.

 

Profit on ordinary activity before taxation of the company was £578,107 (2020: £108,626)

Principal risks and uncertainties

The company's principal risks in order to sustain financial performance have been identified as:

- Ensuring turnover levels

- Maintaining satisfactory gross profit margins

- Controlling levels of expenditure

- Monitoring and controlling the banking exposure

 

These are managed on a day to day basis by the managing director monitoring the following financial key performance indicators:

- management accounts

- sales reports for each trading division

- cash and bank balances against availability and headroom

- trade debtor balances and credit limits

- stock levels

On behalf of the board

S Felstein
Director
9 March 2022
NOVA GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -

The directors present their annual report and financial statements for the year ended 31 December 2021.

Principal activities

The principal activity of the company continued to be that of manufacture and sale of glass and double glazing products.

Results and dividends

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £25,000. The directors do not recommend payment of a final dividend.

Directors

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

S Felstein
I Wootton
S W Ridgard
P Corrie
Financial instruments
Liquidity risk

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

Interest rate risk

The company is exposed to fair value interest rate risk on its fixed rate borrowings and cash flow interest rate risk on floating rate deposits, bank overdrafts and loans. The company will use interest rate derivatives if it considers it necessary to manage the mix of fixed and variable rate debt so as to reduce its exposure to changes in interest rates.

Credit risk

Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board.

 

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

Post reporting date events

There are no matters to report as post balance sheet events.

Auditor

In accordance with the company's articles, a resolution proposing that Lopian Gross Barnett & Co be reappointed as auditor of the company will be put at a General Meeting.

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 company’s auditor 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 company’s auditor is aware of that information.

NOVA GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 3 -
On behalf of the board
S Felstein
Director
9 March 2022
NOVA GROUP LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 4 -

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

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

 

 

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

NOVA GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NOVA GROUP LIMITED
- 5 -
Opinion

We have audited the financial statements of Nova Group Limited (the 'company') for the year ended 31 December 2021 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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 FRS 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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The 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 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.

Opinions on other matters prescribed by the Companies Act 2006

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

NOVA GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NOVA GROUP LIMITED
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.

 

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:

 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 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.

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.

NOVA GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NOVA GROUP LIMITED
- 7 -

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:

 

 

 

 

 

 

 

 

 

Due to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing fraud or non-compliance with laws and regulations and cannot be expected to detect all fraud and non-compliance with laws and regulations.

 

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.

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.

Jonathan Brodie FCA (Senior Statutory Auditor)
For and on behalf of Lopian Gross Barnett & Co
9 March 2022
Chartered Accountants
Statutory Auditor
1st Floor Cloister House
Riverside, New Bailey Street
Manchester
M3 5FS
NOVA GROUP LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 8 -
2021
2020
Notes
£
£
Turnover
3
16,073,665
10,283,118
Cost of sales
(11,989,601)
(8,416,014)
Gross profit
4,084,064
1,867,104
Administrative expenses
(3,506,321)
(2,530,123)
Other operating income
52,261
813,439
Operating profit
4
630,004
150,420
Interest payable and similar expenses
8
(51,897)
(41,794)
Profit before taxation
578,107
108,626
Tax on profit
9
(128,051)
(11,274)
Profit for the financial year
450,056
97,352

The profit and loss account has been prepared on the basis that all operations are continuing operations.

NOVA GROUP LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
- 9 -
2021
2020
£
£
Profit for the year
450,056
97,352
Other comprehensive income
Revaluation of tangible fixed assets (including deferred tax movement)
1,215,000
-
0
Total comprehensive income for the year
1,665,056
97,352
NOVA GROUP LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2021
31 December 2021
- 10 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
11
7,073,292
5,201,595
Investments
12
75
75
7,073,367
5,201,670
Current assets
Stocks
15
1,424,000
1,209,000
Debtors
16
5,759,012
5,117,331
Cash at bank and in hand
53,886
54,438
7,236,898
6,380,769
Creditors: amounts falling due within one year
17
(5,085,294)
(4,540,060)
Net current assets
2,151,604
1,840,709
Total assets less current liabilities
9,224,971
7,042,379
Creditors: amounts falling due after more than one year
18
(962,360)
(773,877)
Provisions for liabilities
Deferred tax liability
21
988,867
634,814
(988,867)
(634,814)
Net assets
7,273,744
5,633,688
Capital and reserves
Called up share capital
23
165
165
Revaluation reserve
3,082,077
1,867,077
Capital redemption reserve
10
10
Profit and loss reserves
4,191,492
3,766,436
Total equity
7,273,744
5,633,688
The financial statements were approved by the board of directors and authorised for issue on 9 March 2022 and are signed on its behalf by:
S Felstein
Director
Company Registration No. 01505265
NOVA GROUP LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 11 -
Share capital
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2020
165
1,867,077
10
3,694,084
5,561,336
Year ended 31 December 2020:
Profit and total comprehensive income for the year
-
-
-
97,352
97,352
Dividends
10
-
-
-
(25,000)
(25,000)
Balance at 31 December 2020
165
1,867,077
10
3,766,436
5,633,688
Year ended 31 December 2021:
Profit for the year
-
-
-
450,056
450,056
Other comprehensive income:
Revaluation of tangible fixed assets
-
1,215,000
-
-
1,215,000
Total comprehensive income for the year
-
0
1,215,000
-
0
450,056
1,665,056
Dividends
10
-
-
-
(25,000)
(25,000)
Balance at 31 December 2021
165
3,082,077
10
4,191,492
7,273,744
NOVA GROUP LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 12 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
31
(56,785)
(346,167)
Interest paid
(51,897)
(41,794)
Corporation tax paid
-
(26,557)
Net cash outflow from operating activities
(108,682)
(414,518)
Investing activities
Purchase of tangible fixed assets
(637,517)
(513,142)
Proceeds on disposal of tangible fixed assets
29,109
203,876
Net cash used in investing activities
(608,408)
(309,266)
Financing activities
Advance / (repayment) of CBILs loan
(61,250)
525,000
Net of advance / (repayments) of bank loans
488,384
(32,548)
Net of increase / (decrease) in hire purchase obligations
314,404
174,842
Dividends paid
(25,000)
(25,000)
Net cash generated from financing activities
716,538
642,294
Net decrease in cash and cash equivalents
(552)
(81,490)
Cash and cash equivalents at beginning of year
54,438
135,928
Cash and cash equivalents at end of year
53,886
54,438
NOVA GROUP LIMITED
NOTES TO THE  FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 13 -
1
Accounting policies
Company information

Nova Group Limited is a private company limited by shares incorporated in England and Wales. The registered office is Norman Road, Altrincham, Cheshire, WA14 4EN.

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. The principal accounting policies adopted are set out below.

The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

 

Nova Group Limited is a wholly owned subsidiary of Nova Double Glazing Systems Limited and the results of Nova Group Limited are included in the consolidated financial statements of Nova Double Glazing Systems Limited which are available from Norman Road, Altrincham, Cheshire, WA14 4EN.

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.2
Turnover and revenue recognition

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.

1.3
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:

Plant and machinery
10-25% straight line
Fixtures, fittings & equipment
10-25% straight line
Motor vehicles
25% straight line

While the remaining useful life of the land and buildings is considered to be 18 years (before re-evaluation), the directors expect the fair value will remain at or above the current value in the accounts at that time. Therefore, no depreciation has been charged on the property. The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

NOVA GROUP LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 14 -
1.4
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

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

1.5
Impairment of fixed assets

At each reporting period end date, the company 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.

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.

1.6
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost 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.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

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.

1.7
Cash and cash equivalents

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

1.8
Financial instruments

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

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

NOVA GROUP LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 15 -
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.

Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.

 

Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.

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.

Derecognition of financial assets

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

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, 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 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 company’s contractual obligations expire or are discharged or cancelled.

NOVA GROUP LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 16 -
1.9
Equity instruments

Equity instruments issued by the company 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 company.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

1.10
Taxation

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

Current tax

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

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the 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 when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.11
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.

1.12
Retirement benefits

The obligation for contributions to defined contribution schemes are recognised as an expense as incurred. The assets of the scheme are held separately from those of the Company in an independently administered fund.

NOVA GROUP LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 17 -
1.13
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.

1.14
Government grants

Grant income relates to furlough income under Coronavirus Job Retention Scheme and interest payments being covered by the government on Coronavirus Business Interruption Loan Scheme.

 

Under the Furlough scheme, cash payments were made to compensate for part of the wages, associated national insurance and employer contributions of employees who have been placed on furlough.

 

This grant income has been recognised under the performance model whereby entitlement to the grant only passes to the company when relevant employees are placed on furlough. Grant income is recognised on a straight line basis over the furlough period for each employee.

 

Grants received before the recognition criteria are satisfied is recognised as a liability.

2
Judgements and key sources of estimation uncertainty

In the application of the company’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.

3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2021
2020
£
£
Turnover analysed by class of business
Manufacture and sale of glass, windows and double glazing products
16,073,665
10,283,118
2021
2020
£
£
Other significant revenue
Government grants received
52,261
813,439
NOVA GROUP LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
3
Turnover and other revenue
(Continued)
- 18 -
2021
2020
£
£
Turnover analysed by geographical market
United Kingdom
16,073,665
10,283,118
4
Operating profit
2021
2020
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(52,261)
(813,439)
Depreciation of owned tangible fixed assets
111,771
81,184
Depreciation of tangible fixed assets held under finance leases
153,470
151,357
Profit on disposal of tangible fixed assets
(28,530)
(182,464)
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 company
17,000
12,500
6
Employees

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

2021
2020
Number
Number
Production staff
146
137
Administrative staff
39
42
Total
185
179

Their aggregate remuneration comprised:

2021
2020
£
£
Wages and salaries
4,333,376
3,774,343
Social security costs
372,663
311,185
Pension costs
251,135
76,708
4,957,174
4,162,236
NOVA GROUP LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 19 -
7
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
373,330
241,112
Company pension contributions to defined contribution schemes
172,357
11,491
545,687
252,603

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2020 - 3).

Remuneration disclosed above include the following amounts paid to the highest paid director:
Remuneration for qualifying services
91,957
65,094
Company pension contributions to defined contribution schemes
80,000
3,564

The above also represents the total of the remuneration and benefits payable to Key management personnel.

8
Interest payable and similar expenses
2021
2020
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
11,692
22,726
Other interest
40,205
19,068
51,897
41,794
9
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
26,463
-
0
Adjustments in respect of prior periods
-
0
(26,557)
Total current tax
26,463
(26,557)
Deferred tax
Origination and reversal of timing differences
101,588
37,831
Total tax charge
128,051
11,274
NOVA GROUP LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
9
Taxation
(Continued)
- 20 -

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
578,107
108,626
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
109,840
20,639
Tax effect of expenses that are not deductible in determining taxable profit
19,000
-
0
Adjustments in respect of prior years
-
0
(26,557)
Group relief
(8,000)
-
0
Research and development tax credit
(6,183)
(9,993)
Deferred tax - other movements (including prior years)
30,443
27,185
Enhanced capital allowances
(17,333)
-
0
Other sundry adjustments
284
-
0
Taxation charge for the year
128,051
11,274
10
Dividends
2021
2020
£
£
Interim paid
25,000
25,000
NOVA GROUP LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 21 -
11
Tangible fixed assets
Land and buildings freehold
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 January 2021
4,500,000
3,402,943
1,314,337
941,288
10,158,568
Additions
-
0
496,093
20,124
121,300
637,517
Disposals
-
0
(1,247,834)
-
0
(79,441)
(1,327,275)
Revaluation
1,500,000
-
0
-
0
-
0
1,500,000
At 31 December 2021
6,000,000
2,651,202
1,334,461
983,147
10,968,810
Depreciation and impairment
At 1 January 2021
-
0
2,880,468
1,303,125
773,380
4,956,973
Depreciation charged in the year
-
0
138,254
10,519
116,468
265,241
Eliminated in respect of disposals
-
0
(1,247,801)
-
0
(78,895)
(1,326,696)
At 31 December 2021
-
0
1,770,921
1,313,644
810,953
3,895,518
Carrying amount
At 31 December 2021
6,000,000
880,281
20,817
172,194
7,073,292
At 31 December 2020
4,500,000
522,475
11,212
167,908
5,201,595

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

2021
2020
£
£
Plant and machinery
768,954
394,447
Motor vehicles
68,081
63,809
837,035
458,256

Land and buildings with a carrying amount of £6,000,000 were revalued at 31 December 2021. The revalued amount was based on what management would expect to achieve on an open market.

Land and buildings are carried at valuation. If land and buildings were measured using the cost model, the carrying amounts would have been approximately £2,060,701 (2020 - £2,070,647).

12
Fixed asset investments
2021
2020
Notes
£
£
Investments in subsidiaries
13
75
75
NOVA GROUP LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 22 -
13
Subsidiaries

These financial statements are separate company financial statements for Nova Group Limited.

Details of the company's subsidiaries at 31 December 2021 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Altrincham Glass Company Limited
England & Wales
Ordinary
100.00
Novapane Insulating Glass Limited
England & Wales
Ordinary
100.00
14
Financial instruments

There are no financial instruments measured at fair value within the accounts.

15
Stocks
2021
2020
£
£
Raw materials and consumables
1,336,000
1,131,000
Finished goods and goods for resale
88,000
78,000
1,424,000
1,209,000
16
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
2,615,148
2,105,941
Corporation tax recoverable
26,557
26,557
Amounts owed by group undertakings
3,030,161
2,866,176
Prepayments and accrued income
87,146
86,122
5,759,012
5,084,796
2021
2020
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 21)
-
0
32,535
Total debtors
5,759,012
5,117,331
NOVA GROUP LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 23 -
17
Creditors: amounts falling due within one year
2021
2020
Notes
£
£
Bank loans
19
1,321,817
833,433
Obligations under finance leases
20
215,055
255,384
Other borrowings
19
105,000
-
0
Trade creditors
988,952
989,327
Amounts owed to group undertakings
1,677,362
1,677,362
Corporation tax
26,463
-
0
Other taxation and social security
509,332
552,030
Other creditors
77,080
69,189
Accruals and deferred income
164,233
163,335
5,085,294
4,540,060
18
Creditors: amounts falling due after more than one year
2021
2020
Notes
£
£
Obligations under finance leases
20
603,610
248,877
Other borrowings
19
358,750
525,000
962,360
773,877
Amounts included above which fall due after five years are as follows:
Payable by instalments
-
43,750
19
Loans and overdrafts
2021
2020
£
£
Bank loans
1,321,817
833,433
Other loans
463,750
525,000
1,785,567
1,358,433
Payable within one year
1,426,817
833,433
Payable after one year
358,750
525,000

The bank loans and overdraft are secured by a 1st legal charge over the group property, a debenture and unlimited guarantee incorporating a fixed and floating charge, a letter of set-off and the groups trade debtors.

 

The other loan relates to a Coronavirus Business Interruption Loan taken over five years (with four years remaining), with an interest rate of 2.53% over the base rate.

NOVA GROUP LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 24 -
20
Finance lease obligations
2021
2020
Future minimum lease payments due under finance leases:
£
£
Within one year
215,055
255,384
In two to five years
603,610
248,877
818,665
504,261

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. Obligations are secured on the assets in question.

21
Deferred taxation

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Liabilities
Liabilities
Assets
Assets
2021
2020
2021
2020
Balances:
£
£
£
£
ACAs
191,327
122,274
-
-
Tax losses
-
-
-
32,535
Revaluations
797,540
512,540
-
-
988,867
634,814
-
32,535
2021
Movements in the year:
£
Liability at 1 January 2021
602,279
Charge to profit or loss
101,588
Charge to other comprehensive income
285,000
Liability at 31 December 2021
988,867
22
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
251,135
76,708

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

NOVA GROUP LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 25 -
23
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 25p each
660
660
165
165
24
Financial commitments, guarantees and contingent liabilities

There are bank debentures and cross-guarantees with Nova Double Glazing Systems Limited secured on the fixed and floating assets of Nova Group Limited. The total debt secured under these arrangements is £881,968 (2020: £1,058,038).

25
Operating lease commitments

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

2021
2020
£
£
Within one year
5,710
-
0
Between two and five years
21,411
-
0
27,121
-
0
26
Events after the reporting date

There were no post balance sheet events which require disclosure at the balance sheet date.

27
Related party transactions
Balances with related parties

The following amounts were outstanding at the reporting end date:

Amounts owed by
Amounts owed to
related parties
related parties
2021
2020
2021
2020
£
£
£
£
Entities over which the entity has control, joint control or significant influence
-
0
-
1,677,362
1,677,362
Entities with control, joint control or significant influence over the company
3,030,161
2,866,176
-
-
28
Directors' transactions

At the balance sheet date there are amounts due to Mr S Felstein of £1,348 (2020: £1,853) and Mrs R Felstein of £918 (2020: £918). Mr and Mrs Felstein are directors of the ultimate parent company Nova Double Glazing Systems Limited, while Mr Felstein is a director of Nova Group Limited.

NOVA GROUP LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 26 -
29
Ultimate controlling party

The ultimate controlling party are Mr & Mrs Felstein by way of the fact that they own 100% of the share capital in the parent undertaking Nova Double Glazing Systems Limited.

30
Response to Covid-19

The directors have reviewed the position at date of signing and consider there have been no further impacts of Covid-19 other than those already disclosed within the accounts.

31
Cash absorbed by operations
2021
2020
£
£
Profit for the year after tax
450,056
97,352
Adjustments for:
Taxation charged
128,051
11,274
Finance costs
51,897
41,794
Gain on disposal of tangible fixed assets
(28,530)
(182,464)
Depreciation and impairment of tangible fixed assets
265,241
232,541
Movements in working capital:
Increase in stocks
(215,000)
(227,000)
Increase in debtors
(674,216)
(678,239)
(Decrease)/increase in creditors
(34,284)
358,575
Cash absorbed by operations
(56,785)
(346,167)
32
Analysis of changes in net debt
1 January 2021
Cash flows
31 December 2021
£
£
£
Cash at bank and in hand
54,438
(552)
53,886
Borrowings excluding overdrafts
(1,358,433)
(427,134)
(1,785,567)
Obligations under finance leases
(504,261)
(314,404)
(818,665)
(1,808,256)
(742,090)
(2,550,346)
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