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Registration number: 01741116

Avonside Insulation Supplies Limited

Annual Report and Financial Statements

for the Year Ended 31 August 2023

 

Avonside Insulation Supplies Limited

Contents

Company Information

1

Strategic Report

2

Directors' Report

3

Statement of Directors' Responsibilities

4

Independent Auditor's Report

5 to 7

Profit and Loss Account

8

Balance Sheet

9

Statement of Changes in Equity

10

Statement of Cash Flows

11

Notes to the Financial Statements

12 to 21

 

Avonside Insulation Supplies Limited

Company Information

Directors

J E Milligan

T G Tams

M N Turner

Company secretary

J E Milligan

Registered office

Olympus House
Britannia Road
Patchway
Bristol
BS34 5TA

Solicitors

Harrison Clark Rickerbys LLP
5 Deansway
Worcester
WR1 2JG

Bankers

HSBC Bank PLC
6 Broad Street
Worcester
WR1 2EJ

Auditors

Hazlewoods LLP
Windsor House
Bayshill Road
Cheltenham
GL50 3AT

 

Avonside Insulation Supplies Limited

Strategic Report for the Year Ended 31 August 2023

The directors present their strategic report for the year ended 31 August 2023.

Principal activity

The principal activity of the company is the supply of insulation materials.

Fair review of the business

The results for the year, which are set out in the profit and loss account, show turnover of £20,158,330 (2022 - £17,657,481) and an operating profit of £1,119,456 (2022 - £758,120). At 31 August 2023, the company had net assets of £2,956,452 (2022 - £2,224,178). The directors consider the performance for the year and the financial position at the year end to be satisfactory.

Development and performance of the business

2023

2022

2021

2020

2019

Turnover

20,158,330

17,657,481

15,823,273

13,383,422

11,915,196

Turnover growth

14.2%

11.6%

18.2%

12.3%

12.4%

Gross profit margin

22.4%

21.9%

20.1%

16.5%

20.9%

Profit (loss) before tax

1,038,127

730,593

390,530

(316,481)

(99,603)

Principal risks and uncertainties

The management of the business and the execution of the company's strategy are subject to a number of risks. The key business risks and uncertainties affecting the company are considered to relate to ongoing compliance with current and future legislation affecting the sector and the general economic outlook for the UK property market.

Financial instruments

Objectives and policies

The board constantly monitors the company's trading results and revise projections as appropriate to ensure that the company can meet its future obligations as they fall due.

Price risk, credit risk, liquidity risk and cash flow risk

The business' principal financial instruments comprise bank balances, trade debtors, trade creditors, loans to the business and finance lease agreements. The main purpose of these instruments is to finance the business' operations.

In respect of bank balances, the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of overdrafts at floating rate of interests. The business makes use of money market facilities where funds are available.

Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. The amounts presented in the balance sheet are net of allowances for doubtful debtors.

Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due. Loans comprise loans from the directors and from financial institutions. The interest rate and monthly repayments on the loans from financial institutions are fixed. The business manages the liquidity risk by ensuring that there are sufficient funds to meet the payments.

The business is a lessee in respect of finance leased assets. The liquidity risk in respect of these is managed by ensuring that there are sufficient funds to meet the payments.

Approved by the Board on 9 February 2024 and signed on its behalf by:


J E Milligan
Director

 

Avonside Insulation Supplies Limited

Directors' Report for the Year Ended 31 August 2023

The directors present their report and the financial statements for the year ended 31 August 2023.

Directors of the company

The directors who held office during the year were as follows:

J E Milligan

T G Tams

M N Turner

Future developments

The external commercial environment is expected to remain competitive in 2023/24 however the directors are
committed to growing and developing the business.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

Reappointment of auditors

Hazlewoods LLP have expressed their willingness to continue in office.

Approved by the Board on 9 February 2024 and signed on its behalf by:


J E Milligan
Director

 

Avonside Insulation Supplies Limited

Statement of Directors' Responsibilities

The directors are responsible for preparing the Strategic Report, Directors' 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:

select suitable accounting policies and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards has been followed, subject to any material departures disclosed and explained in the financial statements; and

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

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

 

Avonside Insulation Supplies Limited

Independent Auditor's Report to the Members of Avonside Insulation Supplies Limited

Opinion

We have audited the financial statements of Avonside Insulation Supplies Limited (the 'company') for the year ended 31 August 2023, which comprise the Profit and Loss Account, Balance Sheet, Statement of Changes in Equity, Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

give a true and fair view of the state of the company's affairs as at 31 August 2023 and of its profit for the year then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor 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 original financial statements were authorised for issue.

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

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

 

Avonside Insulation Supplies Limited

Independent Auditor's Report to the Members of Avonside Insulation Supplies Limited

Opinion on other matter prescribed by the Companies Act 2006

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

the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our 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:

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

the financial statements are not in agreement with the accounting records and returns; or

certain disclosures of directors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page 4, 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.

Extent to which the audit was 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:

We considered the nature of the company’s industry and its control environment and reviewed the company’s documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management about their own identification and assessment of the risks of irregularities.

We obtained an understanding of the legal and regulatory framework that the company operates in and identified the key laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements, including the UK Companies Act and tax legislation, and, those that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty.

We discussed among the audit engagement team regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.

 

Avonside Insulation Supplies Limited

Independent Auditor's Report to the Members of Avonside Insulation Supplies Limited

In common with all audits conducted in accordance with ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override of controls. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgements made in accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.

In addition to the above, our procedures to respond to the risks identified included the following:

reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatements due to fraud;

enquiring of management concerning actual and potential litigation and claims and instances of non-compliance with laws and regulations; and

reading minutes of meetings of those charged with governance.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

A further description of our responsibilities is available 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 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.





Simon Worsley (Senior Statutory Auditor)
For and on behalf of Hazlewoods LLP, Statutory Auditor

Windsor House
Bayshill Road
Cheltenham
GL50 3AT

9 February 2024

 

Avonside Insulation Supplies Limited

Profit and Loss Account for the Year Ended 31 August 2023

Note

2023
 £

2022
 £

Turnover

3

20,158,330

17,657,481

Cost of sales

 

(15,639,399)

(13,795,606)

Gross profit

 

4,518,931

3,861,875

Distribution costs

 

(1,771,693)

(1,702,204)

Administrative expenses

 

(1,570,402)

(1,360,987)

Exceptional items

4

(57,380)

(40,564)

Operating profit

5

1,119,456

758,120

Interest payable and similar charges

6

(81,329)

(27,527)

Profit before tax

 

1,038,127

730,593

Taxation

10

(257,853)

(101,134)

Profit for the financial year

 

780,274

629,459

The above results were derived from continuing operations.

The company has no other comprehensive income for the year.

 

Avonside Insulation Supplies Limited

(Registration number: 01741116)
Balance Sheet as at 31 August 2023

Note

2023
 £

2022
 £

Fixed assets

 

Tangible assets

11

166,744

140,301

Investments

12

1

1

 

166,745

140,302

Current assets

 

Stocks

13

2,005,339

1,447,728

Debtors

14

5,804,966

4,695,590

Cash at bank and in hand

 

157,880

45,088

 

7,968,185

6,188,406

Creditors: Amounts falling due within one year

15

(5,131,640)

(4,087,143)

Net current assets

 

2,836,545

2,101,263

Total assets less current liabilities

 

3,003,290

2,241,565

Creditors: Amounts falling due after more than one year

15

(28,411)

(40,587)

Provisions for liabilities

10

(18,427)

23,200

Net assets

 

2,956,452

2,224,178

Capital and reserves

 

Called up share capital

18

1,000

1,000

Profit and loss account

2,955,452

2,223,178

Total equity

 

2,956,452

2,224,178

Approved and authorised by the Board on 9 February 2024 and signed on its behalf by:
 


J E Milligan
Director

 

Avonside Insulation Supplies Limited

Statement of Changes in Equity for the Year Ended 31 August 2023

Share capital
£

Profit and loss account
£

Total
£

At 1 September 2022

1,000

2,223,178

2,224,178

Profit for the year

-

780,274

780,274

Dividends

-

(48,000)

(48,000)

At 31 August 2023

1,000

2,955,452

2,956,452

Share capital
£

Profit and loss account
£

Total
£

At 1 September 2021

1,000

1,641,719

1,642,719

Profit for the year

-

629,459

629,459

Dividends

-

(48,000)

(48,000)

At 31 August 2022

1,000

2,223,178

2,224,178

 

Avonside Insulation Supplies Limited

Statement of Cash Flows for the Year Ended 31 August 2023

Note

2023
£

2022
£

Cash flows from operating activities

Profit for the year

 

780,274

629,459

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

5

56,084

62,067

Finance costs

6

81,329

27,527

Income tax expense

10

257,853

101,134

 

1,175,540

820,187

Working capital adjustments

 

Increase in stocks

13

(557,611)

(74,928)

Increase in trade debtors

14

(1,045,830)

(770,205)

Increase in trade creditors

15

212,227

128,998

Cash generated from operations

 

(215,674)

104,052

Income taxes paid

10

(136,042)

(82,036)

Net cash flow from operating activities

 

(351,716)

22,016

Cash flows from investing activities

 

Acquisitions of tangible assets

(82,527)

(21,268)

Proceeds from sale of tangible assets

 

-

6,000

Net cash flows from investing activities

 

(82,527)

(15,268)

Cash flows from financing activities

 

Interest paid

6

(81,329)

(27,527)

Payments to finance lease creditors

 

-

(43,502)

Dividends paid

20

(48,000)

(48,000)

Net cash flows from financing activities

 

(129,329)

(119,029)

Net decrease in cash and cash equivalents

 

(563,572)

(112,281)

Cash and cash equivalents at 1 September

 

45,088

157,369

Cash and cash equivalents at 31 August

 

(518,484)

45,088

 

Avonside Insulation Supplies Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

 

1

General information

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

The address of its registered office is:
Olympus House
Britannia Road
Patchway
Bristol
BS34 5TA

 

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except for, where disclosed in these accounting policies, certain items that are shown at fair value.

The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the company operates. Monetary amounts in these financial statements are rounded to the nearest Pound.

Name of parent of group

These financial statements are consolidated in the financial statements of Avonside Insulation Supplies Holdings Ltd.

The financial statements of Avonside Insulation Supplies Holdings Ltd may be obtained from Companies House.

Group accounts not prepared

The company has taken exemption from preparing group accounts as it is included in consolidated accounts for a larger group which are drawn up as full consolidated audited accounts which are filed at Companies House.

Going concern

After reviewing the company's forecasts and projections, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

Judgements and estimation uncertainty

These financial statements do not contain any significant judgements or estimation uncertainty.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the company. The company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the company's activities.

 

Avonside Insulation Supplies Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the company. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, less their residual values, over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Property Improvements

10% straight line

Motor vehicles

25% straight line

Fixtures and fittings

20%-33.33% straight line

Investments

Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

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. All trade debtors are repayable within one year and hence are included at the undiscounted cost of cash expected to be received. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the debtors.

 

Avonside Insulation Supplies Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the First In First Out (FIFO) method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

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 company 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 all are repayable within one year and hence are included at the undiscounted amount of cash expected to be paid.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

 

Avonside Insulation Supplies Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Financial instruments


Classification
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability of the company is presented as a liability on the balance sheet. The corresponding dividends relating to the liability component are charged as interest expenses in the profit and loss account.

 Recognition and measurement
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

 Impairment
Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss as described below.

A non financial asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

The recoverable amount of goodwill is derived from measurement of the present value of the future cash flows of the cash-generating units ('CGUs') of which the goodwill is a part. Any impairment loss in respect of a CGU is allocated first to the goodwill attached to that CGU, and then to other assets within that CGU on a pro-rata basis.

Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised. Where a reversal of impairment occurs in respect of a CGU, the reversal is applied first to the assets (other than goodwill) of the CGU on a pro-rata basis and then to any goodwill allocated to that CGU.

For financial assets carried at amortised cost, the amount of an impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.

Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

 

Avonside Insulation Supplies Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

 

3

Revenue

The total turnover of the company has been derived from its principal activity wholly undertaken in the United Kingdom.

 

4

Exceptional items

2023
£

2022
£

Exceptional items

57,380

40,564

Exceptional items in both years relate to non-recurring bad debt provisions.

 

5

Operating profit

Arrived at after charging/(crediting)

2023
£

2022
£

Depreciation expense

56,084

68,067

Operating lease expense - property

359,838

309,813

Operating lease expense - plant and machinery

42,952

25,686

Operating lease expense - other

205,128

248,695

 

6

Interest payable and similar expenses

2023
£

2022
£

Interest on bank overdrafts and borrowings

77,409

21,489

Interest on obligations under finance leases and hire purchase contracts

3,920

6,038

81,329

27,527

 

7

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2023
 £

2022
 £

Wages and salaries

1,217,328

1,085,522

Social security costs

127,178

108,146

Pension costs, defined contribution scheme

63,869

45,974

1,408,375

1,239,642

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

2023
 No.

2022
 No.

Administration and support

3

3

Distribution

23

22

Management

4

4

30

29

 

Avonside Insulation Supplies Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

 

8

Directors' remuneration

The directors' remuneration for the year was as follows:

2023
£

2022
£

Remuneration

123,522

91,104

 

9

Auditors' remuneration

2023
£

2022
£

Audit of the financial statements

6,750

6,000

 

10

Taxation

Tax charged/(credited) in the profit and loss account

2023
£

2022
£

Current taxation

UK corporation tax

218,106

135,993

UK corporation tax adjustment to prior periods

(1,880)

1,929

216,226

137,922

Deferred taxation

Arising from origination and reversal of timing differences

41,627

(36,788)

Tax expense in the income statement

257,853

101,134

The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2022 - lower than the standard rate of corporation tax in the UK) of 21.5% (2022 - 19%).

The differences are reconciled below:

2023
£

2022
£

Profit before tax

1,038,127

730,593

Corporation tax at standard rate

223,197

138,813

Effect of expense not deductible in determining taxable profit (tax loss)

3,872

6,111

Deferred tax expense/(credit) from unrecognised temporary difference from a prior period

41,627

(36,788)

Tax decrease from effect of capital allowances and depreciation

(8,963)

(8,939)

Other tax effects for reconciliation between accounting profit and tax expense (income)

(1,880)

1,937

Total tax charge

257,853

101,134

 

Avonside Insulation Supplies Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

Deferred tax

Deferred tax assets and liabilities

2023

Liability
[[£

Difference between accumulated depreciation and amortisation and capital allowances

30,927

Short term timing differences

(12,500)

18,427

2022

Asset
£

Difference between accumulated depreciation and amortisation and capital allowances

(22,595)

Short term timing differences

45,795

23,200

 

11

Tangible assets

Property improvements
£

Furniture, fittings and equipment
 £

Motor vehicles
 £

Total
£

Cost

At 1 September 2022

74,298

417,070

93,050

584,418

Additions

1,725

6,802

74,000

82,527

At 31 August 2023

76,023

423,872

167,050

666,945

Depreciation

At 1 September 2022

27,729

324,486

91,902

444,117

Charge for the year

7,545

35,434

13,105

56,084

At 31 August 2023

35,274

359,920

105,007

500,201

Carrying amount

At 31 August 2023

40,749

63,952

62,043

166,744

At 31 August 2022

46,569

92,584

1,148

140,301


Leased assets
Included within the net book value of tangible fixed assets is £46,198 (2022 - £70,921) in respect of assets held under finance leases and similar hire purchase contracts. Depreciation for the year on these assets was £24,724 (2022 - £31,280).

 

Avonside Insulation Supplies Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

 

12

Investments in subsidiaries

2023
£

2022
£

Investments in subsidiaries

1

1

Subsidiaries

£

Cost and carrying amount

At 1 September 2022 and at 31 August 2023

1

Details of undertakings

Details of the investments in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking

Registered office

Holding

Proportion of voting rights and shares held

     

2023

2022

Subsidiary undertakings

Avonside Insulation Supplies (ST) Limited

Ordinary

100%

100%

 

England and Wales

     

Subsidiary undertakings

Avonside Insulation Supplies (ST) Limited

The principal activity of Avonside Insulation Supplies (ST) Limited is that of a dormant company.

Avonside Insulation Supplies (ST) Limited has the same registered office as Avonside Insulation Supplies Limited.

 

13

Stocks

2023
£

2022
£

Stocks

2,005,339

1,447,728

 

14

Debtors

2023
 £

2022
 £

Trade debtors

4,954,353

4,008,722

Other debtors

87,168

-

Prepayments

374,887

361,856

Amounts owed by group undertakings

325,012

325,012

Owed by related parties

63,546

-

 

5,804,966

4,695,590

 

Avonside Insulation Supplies Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

 

15

Creditors

Note

2023
 £

2022
 £

Due within one year

 

Loans and borrowings

16

1,340,306

566,755

Trade creditors

 

3,148,973

3,135,678

Social security and other taxes

 

138,416

34,466

Other creditors

 

50,819

9,644

Accrued expenses

 

235,020

181,213

Corporation tax liability

10

218,106

137,922

Amounts owed by related parties

 

-

21,465

 

5,131,640

4,087,143

Due after one year

 

Loans and borrowings

16

28,411

40,587

 

16

Loans and borrowings

2023
£

2022
£

Current loans and borrowings

HP and finance lease liabilities

12,176

24,341

Other borrowings

1,328,130

542,414

1,340,306

566,755

2023
£

2022
£

Non-current loans and borrowings

HP and finance lease liabilities

28,411

40,587

Amounts owed under a confidential invoice discounting arrangement of £1,328,130 (2022 - £542,414) are secured over the company's trade debts.

The finance leases are secured over the assets to which they relate.

 

17

Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £63,869 (2022 - £45,974).

 

18

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary shares of £1 each

1,000

1,000

1,000

1,000

         
 

Avonside Insulation Supplies Limited

Notes to the Financial Statements for the Year Ended 31 August 2023

 

19

Obligations under leases and hire purchase contracts

Operating leases

The total of future minimum lease payments is as follows:

2023
£

2022
£

Not later than one year

123,150

355,767

Later than one year and not later than five years

344,848

593,494

Later than five years

103,500

287,429

571,498

1,236,690

 

20

Dividends

2023
 £

2022
 £

Dividends paid

48,000

48,000

 

21

Contingent liabilities

The company is bound by an unlimited bilateral cross company guarantee arrangement with its related company Kellaway Building Supplies Limited. The guarantee is secured by a fixed and floating charge over the tangible and intangible assets of the company and covers the following facilities that have been made available to Kellaway Building Supplies Limited: Bank loans and overdraft facilities of £1,713,264 (2022 - £2,054,868). There is also security over the invoice discounting facility.

 

22

Related party transactions

The company has taken advantage of the exemption in FRS 102 Section 33 'Related Party Disclosures' from the requirement to disclose transactions with wholly owned group companies on the grounds that the group companies are wholly owned.

Other related party transactions.

During the year, the company made the following related party transactions:

Kellaway Building Supplies Limited
(a company controlled by J E Milligan)
At the balance sheet date, the amount due from Kellaway Building Supplies Limited was £63,546 (2022 - amount due to Kellaway of £21,465).
 

 

23

Parent and ultimate parent undertaking

The ultimate parent is Avonside Insulation Supplies Holdings Ltd, incorporated in England and Wales.

 The ultimate controlling party is J E Milligan by virtue of his shareholding in Avonside Insulation Supplies Holdings Ltd.