Company registration number 11464204 (England and Wales)
AFTERCARE RESPONSE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
AFTERCARE RESPONSE LIMITED
COMPANY INFORMATION
Directors
Mr P J Bevan
Mr A S Bevan
Company number
11464204
Registered office
Wednesbury One
Black Country New Road
Wednesbury
West Midlands
WS10 7NZ
Auditor
CK Audit
No 4 Castle Court 2
Castlegate Way
Dudley
West Midlands
DY1 4RH
Business address
Wednesbury One
Black Country New Road
Wednesbury
West Midlands
WS10 7NZ
AFTERCARE RESPONSE LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 19
AFTERCARE RESPONSE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the business
The Directors present the strategic report for the year ended 31 December 2023
We aim to present a balanced and comprehensive review of the development and performance of the business and its position at the year end. The review is consistent with the size and complexity of the business and in the context of the risks and uncertainty it faces.
The Company is a leading nationwide mobile maintenance company specialising in ancillary equipment servicing and commercial vehicle body repairs.
The company has seen a small increase in sales from £10,380,371 to £10,438,002. Whilst the company increased its customer base significant problems with its IT system resulted in a loss of sales during the year.
Pre-tax profits decreased during the year from £814,294 to £18,961.
Shareholder funds have increased / decreased from £1,546,957 to £1,460,944.
The KPI’s of the business are profit and liquidity and the company uses these KPI’s to determine customer profitability.
The Company is a wholly owned subsidiary of AC Response Holdings Ltd. Consolidated Accounts are now prepared for the holding company.
Sales are expected to grow during 2024 and as a result profits are expected to increase in line with the increased sales. The company has a strong order book and continues to gain new customers as a result of its increased level of competency and customer service network. IT difficulties experienced during the year have now been fully resolved and future challenges for the company come from increased operating costs from fuel and labour however the company is well placed to deal with these increases.
Mr P J Bevan
Director
4 June 2024
AFTERCARE RESPONSE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activities of the company commercial vehicle repair specialists offering extensive mobile services including roadside breakdown assistance.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £100,000. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr P J Bevan
Mr A S Bevan
Auditor
The auditor, CK Audit, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
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.
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.
AFTERCARE RESPONSE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
On behalf of the board
Mr P J Bevan
Director
4 June 2024
AFTERCARE RESPONSE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF AFTERCARE RESPONSE LIMITED
- 4 -
Opinion
We have audited the financial statements of Aftercare Response Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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:
give a true and fair view of the state of the company's affairs as at 31 December 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
AFTERCARE RESPONSE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF AFTERCARE RESPONSE LIMITED (CONTINUED)
- 5 -
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 directors' 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:
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 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 directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We identified and assessed the risks of material misstatement of the financial statements, in respect of irregularities whether due to fraud or error, or non compliance with laws and regulations and then designed and performed audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:
We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company by discussion and enquiry with the directors and management team and our general knowledge and experience of the automotive 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, data protection, employment, vehicle standards and health and safety legislation;
We assessed the extent of compliance with the laws and regulations identified above through making enquiries of management, reviewing correspondence with relevant regulators and discussing with management;
AFTERCARE RESPONSE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF AFTERCARE RESPONSE LIMITED (CONTINUED)
- 6 -
We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur. Audit procedures performed included but were not limited to:
Discussions with directors and management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;
Confirming our understanding of controls by performing a walk through test or observation and enquiry
Performing analytical procedures to identify any unusual or unexpected relationships;
Challenging assumptions and judgements made by management in its significant accounting estimates;
Identifying and testing journal entries;
Reviewing unusual or unexpected transactions; and
Agreeing the financial statement disclosures to underlying supporting documentation.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
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.
Mark Nicholls
Senior Statutory Auditor
For and on behalf of CK Audit
4 June 2024
Chartered Accountants
Statutory Auditor
No 4 Castle Court 2
Castlegate Way
Dudley
West Midlands
DY1 4RH
AFTERCARE RESPONSE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
2
10,438,001
10,380,371
Cost of sales
(6,694,561)
(6,244,736)
Gross profit
3,743,440
4,135,635
Administrative expenses
(3,563,827)
(3,321,278)
Other operating income
5,515
Exceptional item
3
(160,652)
Operating profit
4
18,961
819,872
Interest payable and similar expenses
6
(5,578)
Profit before taxation
18,961
814,294
Tax on profit
7
(4,756)
(158,541)
Profit for the financial year
14,205
655,753
The profit and loss account has been prepared on the basis that all operations are continuing operations.
AFTERCARE RESPONSE LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
181,596
126,812
Current assets
Stocks
10
778,303
731,684
Debtors
11
2,956,179
2,600,200
Cash at bank and in hand
96,543
569,922
3,831,025
3,901,806
Creditors: amounts falling due within one year
12
(2,519,843)
(2,462,185)
Net current assets
1,311,182
1,439,621
Total assets less current liabilities
1,492,778
1,566,433
Provisions for liabilities
Deferred tax liability
14
31,834
19,694
(31,834)
(19,694)
Net assets
1,460,944
1,546,739
Capital and reserves
Called up share capital
16
100
100
Profit and loss reserves
1,460,844
1,546,639
Total equity
1,460,944
1,546,739
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 4 June 2024 and are signed on its behalf by:
Mr P J Bevan
Director
Company registration number 11464204 (England and Wales)
AFTERCARE RESPONSE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
100
890,886
890,986
Year ended 31 December 2022:
Profit and total comprehensive income
-
655,753
655,753
Balance at 31 December 2022
100
1,546,639
1,546,739
Year ended 31 December 2023:
Profit and total comprehensive income
-
14,205
14,205
Dividends
8
-
(100,000)
(100,000)
Balance at 31 December 2023
100
1,460,844
1,460,944
AFTERCARE RESPONSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
1
Accounting policies
Company information
Aftercare Response Limited is a private company limited by shares incorporated in England and Wales. The registered office is Wednesbury One, Black Country New Road, Wednesbury, West Midlands, WS10 7NZ.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
AFTERCARE RESPONSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 11 -
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
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:
Plant and equipment
10 - 33% straight line
Computers
33% straight line
Motor vehicles
25% reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
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.
AFTERCARE RESPONSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
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.
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.
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.
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.
AFTERCARE RESPONSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
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
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
2
Turnover
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
10,438,001
10,380,371
AFTERCARE RESPONSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
3
Exceptional item
2023
2022
£
£
Expenditure
Exceptional costs associated with cyber attack
160,652
-
Exceptional items represents specific time costs and computer expenses associated with the rebuild following a cyber attack that took place in the year. This was a one-off event that had a significant impact on the trading results of the business.
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
11,550
8,500
Depreciation of owned tangible fixed assets
63,899
41,066
Operating lease charges
665,449
416,175
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administration
43
42
Production
58
52
Total
101
94
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
4,046,196
3,788,156
Social security costs
432,678
398,172
Pension costs
81,279
74,234
4,560,153
4,260,562
AFTERCARE RESPONSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
6
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
-
2,045
Interest on finance leases and hire purchase contracts
-
3,533
5,578
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
151,659
Adjustments in respect of prior periods
(7,384)
Total current tax
(7,384)
151,659
Deferred tax
Origination and reversal of timing differences
12,140
6,882
Total tax charge
4,756
158,541
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:
2023
2022
£
£
Profit before taxation
18,961
814,294
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
4,740
154,716
Tax effect of expenses that are not deductible in determining taxable profit
549
824
Permanent capital allowances in excess of depreciation
(2,865)
(1,726)
Change in tax rate to 25%
2,332
4,727
Taxation charge for the year
4,756
158,541
8
Dividends
2023
2022
£
£
Final paid
100,000
AFTERCARE RESPONSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
9
Tangible fixed assets
Plant and equipment
Computers
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
90,030
185,450
275,480
Additions
96,843
21,840
118,683
At 31 December 2023
186,873
21,840
185,450
394,163
Depreciation and impairment
At 1 January 2023
46,345
102,323
148,668
Depreciation charged in the year
37,050
6,067
20,782
63,899
At 31 December 2023
83,395
6,067
123,105
212,567
Carrying amount
At 31 December 2023
103,478
15,773
62,345
181,596
At 31 December 2022
43,685
83,127
126,812
10
Stocks
2023
2022
£
£
Finished goods and goods for resale
778,303
731,684
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,839,416
1,808,415
Gross amounts owed by contract customers
915,401
754,469
Corporation tax recoverable
7,384
Amounts owed by group undertakings
100
100
Other debtors
39,268
22,040
Prepayments and accrued income
154,610
15,176
2,956,179
2,600,200
AFTERCARE RESPONSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
12
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
13
677
Trade creditors
844,962
489,766
Corporation tax
151,659
Other taxation and social security
404,441
419,135
Other creditors
1,013,685
1,040,709
Accruals and deferred income
256,755
360,239
2,519,843
2,462,185
13
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
677
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
14
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
36,636
19,694
Retirement benefit obligations
(4,802)
-
31,834
19,694
2023
Movements in the year:
£
Liability at 1 January 2023
19,694
Charge to profit or loss
12,140
Liability at 31 December 2023
31,834
AFTERCARE RESPONSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
15
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
81,279
74,234
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.
16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
17
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
683,314
195,612
Between two and five years
1,671,804
184,483
2,355,118
380,095
18
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sales
Sales
Purchases
Purchases
2023
2022
2023
2022
£
£
£
£
Entities with common control
132,467
78,109
409,871
411,121
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due to related parties
£
£
Entities with control, joint control or significant influence over the company
997,592
1,027,859
AFTERCARE RESPONSE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
18
Related party transactions
(Continued)
- 19 -
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due from related parties
£
£
Entities with control, joint control or significant influence over the company
1,078
135
19
Ultimate controlling party
The parent company of Aftercare Response Limited is AC Response Holdings Limited, a company registered in England and Wales. AC Response Holdings Limited prepares group financial statements and copies can be obtained from the Company's registered office.
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