Company registration number 08783848 (England and Wales)
BERKS INSULATION LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2022
BERKS INSULATION LIMITED
COMPANY INFORMATION
Director
Mr M U Ali
Company number
08783848
Registered office
Albion House
Albion Close
Slough
SL2 5DT
England
Auditor
Sterling Grove Accountants Limited
Fawley House
2 Regatta Place
Marlow Road
Bourne End
Bucks
SL8 5TD
BERKS INSULATION LIMITED
CONTENTS
Page
Strategic report
1 - 2
Director's report
3
Director's responsibilities statement
4
Independent auditor's report
5 - 8
Income statement
9
Statement of comprehensive income
10
Statement of financial position
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 25
BERKS INSULATION LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 1 -

The director presents the strategic report for the year ended 30 November 2022.

Review of the business
The key financial and other performance indicators during the year were as follows:
2022
2021
£
£
Turnover
13,454,617
17,043,829
Operating profit/(loss)
1,108,452
2,165,811
Profit/(loss) after tax
879,043
1,742,040
Net assets
3,086,838
6,207,795
Profit and loss reserves
3,086,738
6,207,695
Average number of employees
17
25

The company specialises in the installation of insulation measures and boilers in residential properties to trade carbon credits.

 

During the year, company turnover has decreased significantly due to a change in Government funding schemes. There is a slight decrease in gross profit margin mainly due to inflation and associated increased costs.

 

Despite lower turnover and GP margin, the company has managed to maintain a healthy net profit by controlling the administration costs.

 

The director believes that with new projects in pipeline, the company's trading activity will revert back to normal levels in 2023.

Principal risks and uncertainties

The principal risks and uncertainties facing the company are listed below.

 

Competition risk

The company has the ability to fend off competition by negotiating better terms with the main customer.

 

Credit risk

The director actively monitors credit control to mitigate the risk of bad debts. As the company's core business is with energy companies, any risk is further mitigated. Appropriate credit limits are set for customers and amounts due are collected within agreed credit terms.

 

Liquidity risk

The company manages its cash flow through timely billing and collection of its contracts revenue to ensure sufficient liquid resources to meet current and future operating needs of the business.

 

Future developments

The director aims to maintain the management policies which have resulted in the company's success and growth over the years. The director considers the outlook for the company to be very positive and that post pandemic conditions will not have a major impact on the company's growth. The management will continue to make adaptations as necessary to keep operating with the same success under the economic challenges that still lie ahead.

 

Going concern

At the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The Company has enough reserves including director support to ensure that the Company stays operational. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

BERKS INSULATION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 2 -
Other performance indicators

Compliance with relevant environmental laws and regulations relevant to its operations are closely followed.

On behalf of the board

Mr M U Ali
Director
17 November 2023
BERKS INSULATION LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 3 -

The director presents his annual report and financial statements for the year ended 30 November 2022.

Principal activities

The principal activity of the company continued to be that of Insulation.

Results and dividends

The results for the year are set out on page 9.

 

The company paid dividends amounting to £4,000,000 (2021: £1,000,000) to its parent company.

Ordinary dividends were paid amounting to £4,000,000. The director does not recommend payment of a final 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 M U Ali
Auditor

Sterling Grove Accountants Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed 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.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Mr M U Ali
Director
17 November 2023
BERKS INSULATION LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 4 -

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 company and of the profit or loss of the company 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 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. He is 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.

BERKS INSULATION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF BERKS INSULATION LIMITED
- 5 -
Opinion

We have audited the financial statements of Berks Insulation Limited (the 'company') for the year ended 30 November 2022 which comprise the income statement, the statement of comprehensive income, the statement of financial position, 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 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 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 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.

Opinions on other matters prescribed by the Companies Act 2006

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

BERKS INSULATION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF BERKS INSULATION 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 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 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 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.

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

BERKS INSULATION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF BERKS INSULATION LIMITED
- 7 -

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

The extent to which the audit was considered capable of detecting irregularities including fraud:

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:

Our approach to identifying and assessing the risks of material misstatements 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 company through discussions with directors and other management, and from our commercial knowledge and experience of the insulation and energy sector;

-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 company, including the companies Act 2006, taxation legislation and data protection, anti-bribery, employment, environmental and health and safety legislation;

-we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

-identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company’s 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 are susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

-considering the internal control 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 to identify unusual transactions.

-assessed whether judgement and assumptions made in determining the accounting estimates set out in the accounting policies were indicative of potential bias; and

-investigated the rationale behind significant or unusual transactions.

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; and

-reviewing correspondence with HMRC, relevant regulators and the company’s legal advisors.

BERKS INSULATION LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF BERKS INSULATION LIMITED
- 8 -

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 for the audit of the financial statements is located on the financial reporting council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our 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 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.

Gino Amasanti
Senior Statutory Auditor
For and on behalf of Sterling Grove Accountants Limited
17 November 2023
Statutory Auditor
Fawley House
2 Regatta Place
Marlow Road
Bourne End
Bucks
SL8 5TD
BERKS INSULATION LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 9 -
2022
2021
Notes
£
£
Turnover
4
13,454,617
17,043,829
Cost of sales
(10,808,575)
(12,936,840)
Gross profit
2,646,042
4,106,989
Administrative expenses
(1,537,590)
(2,081,989)
Other operating income
-
0
140,811
Operating profit
5
1,108,452
2,165,811
Interest receivable and similar income
8
183
409
Interest payable and similar expenses
9
(21,338)
(14,068)
Profit before taxation
1,087,297
2,152,152
Tax on profit
10
(208,254)
(410,112)
Profit for the financial year
879,043
1,742,040

The income statement has been prepared on the basis that all operations are continuing operations.

BERKS INSULATION LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 10 -
2022
2021
£
£
Profit for the year
879,043
1,742,040
Other comprehensive income
-
-
Total comprehensive income for the year
879,043
1,742,040
BERKS INSULATION LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
30 NOVEMBER 2022
30 November 2022
- 11 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
12
286,454
383,319
Current assets
Stocks
14
63,409
56,702
Debtors
15
4,919,008
6,814,624
Cash at bank and in hand
1,273,592
1,448,530
6,256,009
8,319,856
Creditors: amounts falling due within one year
16
(3,415,625)
(2,459,380)
Net current assets
2,840,384
5,860,476
Total assets less current liabilities
3,126,838
6,243,795
Provisions for liabilities
Deferred tax liability
18
40,000
36,000
(40,000)
(36,000)
Net assets
3,086,838
6,207,795
Capital and reserves
Called up share capital
20
100
100
Profit and loss reserves
3,086,738
6,207,695
Total equity
3,086,838
6,207,795

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true

The financial statements were approved and signed by the director and authorised for issue on 17 November 2023
Mr M U Ali
Director
Company registration number 08783848 (England and Wales)
BERKS INSULATION LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 December 2020
100
5,465,655
5,465,755
Year ended 30 November 2021:
Profit and total comprehensive income for the year
-
1,742,040
1,742,040
Dividends
11
-
(1,000,000)
(1,000,000)
Balance at 30 November 2021
100
6,207,695
6,207,795
Year ended 30 November 2022:
Profit and total comprehensive income for the year
-
879,043
879,043
Dividends
11
-
(4,000,000)
(4,000,000)
Balance at 30 November 2022
100
3,086,738
3,086,838
BERKS INSULATION LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 13 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
5,345,942
3,205,853
Interest paid
(21,338)
(14,068)
Income taxes paid
(1,446,861)
(1,715,634)
Net cash inflow from operating activities
3,877,743
1,476,151
Investing activities
Purchase of tangible fixed assets
(247,446)
(261,502)
Proceeds from disposal of tangible fixed assets
194,582
38,583
Interest received
183
409
Net cash used in investing activities
(52,681)
(222,510)
Financing activities
Payment of finance leases obligations
-
0
(24,100)
Dividends paid
(4,000,000)
(1,000,000)
Net cash used in financing activities
(4,000,000)
(1,024,100)
Net (decrease)/increase in cash and cash equivalents
(174,938)
229,541
Cash and cash equivalents at beginning of year
1,448,530
1,218,989
Cash and cash equivalents at end of year
1,273,592
1,448,530
BERKS INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 14 -
1
Accounting policies
Company information

The company is a private company limited by share capital, incorporated in England and Wales with registration number 08783848.

The address of its registered office is:

Albion House

Albion Close

Slough

SL2 5DT

England

 

These financial statements were authorised for issue by the director on ------------------------

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.

1.2
Going concern

These financial statements are prepared on the going concern basis. The director has a reasonable expectation that the company will continue in operational existence for the foreseeable future.

1.3
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.

The company recognises revenue when a service has been completed and it has been approved. Where the provision of a service has been completed by the end of the year but has not been invoiced and approved until after the year end, the income is recognised and is part of the debtors balance within accrued income.

1.4
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:

Fixtures and fittings
25% Straight line method
Motor vehicles
25% Straight line method

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.

BERKS INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2022
1
Accounting policies
(Continued)
- 15 -
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.

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.

1.6
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 statement of financial position when the company becomes party to the contractual provisions of the instrument.

 

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

BERKS INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2022
1
Accounting policies
(Continued)
- 16 -
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.

Other financial assets

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.

Impairment of financial assets

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

 

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

 

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

Derecognition of financial assets

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

Classification of financial liabilities

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

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future 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.

BERKS INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2022
1
Accounting policies
(Continued)
- 17 -
Other financial liabilities

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 through 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.

Derecognition of financial liabilities

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

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.

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 income statement 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 income statement, 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.

BERKS INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2022
1
Accounting policies
(Continued)
- 18 -
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

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

1.13
Leases

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

1.14
Government grants

Government grants are recognised under the accrual model of grant recognition. This model requires the grant to be classified as either a revenue-based grant or a capital-based grant.

 

Government grants are recognised in profit or loss on a systematic basis over the periods in which the entity recognises expenses for the related costs for which the grants are intended to compensate.

 

1.15

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

 

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables.

1.16

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

 

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

 

BERKS INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 19 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’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.

3
Disclosure exemption

The company has taken advantage of the disclosure exemption Section 33 Related Party Disclosures paragraph 33.7 when preparing these financial statements, as permitted by the FRS102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

 

The information is included in the consolidated financial statements of Berks US Holdings Ltd as 30 November 2022 and these financial statements may be obtained from Albion House, Albion Close, Slough, Berkshire, SL2 5DT England.

4
Turnover and other revenue
2022
2021
£
£
Sale of goods and rendering of services
13,454,617
17,043,829
2022
2021
£
£
Other revenue
Interest income
183
409
5
Operating profit
2022
2021
Operating profit for the year is stated after charging:
£
£
Depreciation of owned tangible fixed assets
145,795
118,484
Loss on disposal of tangible fixed assets
3,934
5,364
Operating lease charges
84,164
87,211
Government grants

The company received government assistance totalling £Nil (2021 - 140,811) as a direct consequences of the Covid-19 pandemic in the form of the Coronavirus Job Retention Scheme (CJRS) grant, in respect of the furlough scheme.

BERKS INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 20 -
6
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
23,000
26,000
All other non-audit services
-
13,137
23,000
39,137
7
Employees

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

2022
2021
Number
Number
Production
16
24
Administration & support
1
1
Total
17
25

Their aggregate remuneration comprised:

2022
2021
£
£
Wages and salaries
499,849
443,684
Social security costs
46,682
28,237
Pension costs
7,918
8,138
554,449
480,059
8
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest on bank deposits
183
409
2022
2021
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
183
409
BERKS INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 21 -
9
Interest payable and similar expenses
2022
2021
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
-
13,544
Interest payable to group undertakings
15,397
-
0
15,397
13,544
Other finance costs:
Interest on finance leases and hire purchase contracts
-
524
Other interest
5,941
-
0
21,338
14,068
10
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
204,254
406,112
Deferred tax
Origination and reversal of timing differences
4,000
4,000
Total tax charge
208,254
410,112

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:

2022
2021
£
£
Profit before taxation
1,087,297
2,152,152
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
206,586
408,909
Tax effect of expenses that are not deductible in determining taxable profit
2,734
1,777
Change in unrecognised deferred tax assets
4,000
4,000
Depreciation on assets not qualifying for tax allowances
(5,703)
(5,769)
Tax decrease from changes in pension fund prepayment
637
(78)
Other tax effects for reconciliation between accounting profit and tax expense (income)
-
0
1,273
Taxation charge for the year
208,254
410,112
BERKS INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 22 -
11
Dividends
2022
2021
£
£
Interim paid
4,000,000
1,000,000
12
Tangible fixed assets
Fixtures and fittings
Motor vehicles
Total
£
£
£
Cost
At 1 December 2021
55,193
524,633
579,826
Additions
18,139
229,307
247,446
Disposals
-
0
(244,092)
(244,092)
At 30 November 2022
73,332
509,848
583,180
Depreciation and impairment
At 1 December 2021
21,202
175,305
196,507
Depreciation charged in the year
18,333
127,462
145,795
Eliminated in respect of disposals
-
0
(45,576)
(45,576)
At 30 November 2022
39,535
257,191
296,726
Carrying amount
At 30 November 2022
33,797
252,657
286,454
At 30 November 2021
33,991
349,328
383,319
13
Financial Instruments

Categorisation of financial instruments

 

2022

2021

 

 

£

£

Financial assets measured at amortised cost

 

3,275,442

5,291,639

Financial liabilities measured at amortised cost

3,415,625

2,459,380

14
Stocks
2022
2021
£
£
Finished goods and goods for resale
63,409
56,702
BERKS INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 23 -
15
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
2,330,571
837,484
Corporation tax recoverable
568,874
-
0
Amounts owed by group undertakings
-
0
2,832,303
Other debtors
333,062
1,579,668
Prepayments and accrued income
1,686,501
1,565,169
4,919,008
6,814,624
16
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
1,373,141
808,738
Corporation tax
-
0
673,733
Other taxation and social security
345,723
5,430
Other creditors
322,314
57,038
Accruals and deferred income
1,374,447
914,441
3,415,625
2,459,380
17
Other Creditors Breakdown

 

 

 

2022

2021

 

 

 

£

£

Net Wages

 

 

2,391

 

Amount due to related companies

 

 

56,241

 

Amount owed to group undertakings

 

171,074

 

Other Creditors

 

 

92,608

57,038

 

 

 

 

 

 

 

 

322,314

57,038

18
Deferred taxation

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

Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
40,000
36,000
BERKS INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2022
18
Deferred taxation
(Continued)
- 24 -
2022
Movements in the year:
£
Liability at 1 December 2021
36,000
Charge to profit or loss
4,000
Liability at 30 November 2022
40,000

The deferred tax liability of £24,000 is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

19
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
7,918
8,138

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.

20
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100

Rights, preferences and restrictions

Ordinary shares of £1 each have the following rights, preferences and restrictions:

Each share has full rights in the company with respect to voting, dividends and distributions.

 

22
Related party transactions

Debtors due within one year, include an amount of £278,402 (2021 - £758,862) due from related

companies. These loans were interest free & repayable on demand.

 

Creditors due within one year, include an amount of £56,241 (2021 - £Nil) due to related companies. These loans were interest free & repayable on demand.

 

During the year the company made sales of £69,175 and purchases of £1,709,160, with a related company.

23
Related party transactions

The company is a wholly owned subsidiary of a group that prepares publicly available consolidated financial statements, namely the group headed by Berks US Holdings Ltd, so it has taken advantage of the exemptions available under Section 33.7 of the Financial Reporting Standard 102 to disclose related party transactions entered into between two or more members of a group.

BERKS INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2022
- 25 -
24
Parent & ultimate parent undertaking

The company's immediate parent is Berks US Holdings Ltd, incorporated in England.

 

The most senior parent entity producing publicly available financial statements is Berks US Holdings Ltd. These financial statements are available upon request from Albion House, Albion Close, Slough, Berkshire, SL2 5DT England.

 

 

25
Cash generated from operations
2022
2021
£
£
Profit for the year after tax
879,043
1,742,040
Adjustments for:
Taxation charged
208,254
410,112
Finance costs
21,338
14,068
Investment income
(183)
(409)
Loss on disposal of tangible fixed assets
3,934
5,364
Depreciation and impairment of tangible fixed assets
145,795
118,484
Movements in working capital:
Increase in stocks
(6,707)
(56,702)
Decrease in debtors
2,464,490
3,459,923
Increase/(decrease) in creditors
1,629,978
(2,487,027)
Cash generated from operations
5,345,942
3,205,853
26
Analysis of changes in net funds
1 December 2021
Cash flows
30 November 2022
£
£
£
Cash at bank and in hand
1,448,530
(174,938)
1,273,592
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