The directors present the strategic report for the year ended 31 March 2024.
Turnover for the year ended 31 March 2024 was £22.8m (year ended 31 March 2023: £15.8m). Reporting a profit before tax of £1.9m (year ended 31 March 2023: loss £1.1m).
The directors were encouraged by the financial performance of the business in the period under review. The business recovered well from a disappointing performance last year with revenue and profit growth of 44% and 273% respectively.
The year to March 31st, 2024 was the first full year of delivery of the non-ECO (Energy Company Obligation) government funded revenue streams and was unhindered by the exceptional circumstances for example Covid-19 and the war in Ukraine
that had been experienced in previous years.
The return to profitability experienced in Q4 of FY23 continued positively into Q1 of FY24. In Q2 the latest round of government funding was released, supporting further iterations of non-ECO government schemes. This allowed for the implementation a new pricing strategy for insulation products, with enhanced rates on those achieved in the prior year. With the main element of growth being price rather than volume driven, this impacted positively directly through to margin.
Dyson is now significantly less reliant on the ECO market with its main revenue streams now being from other government funded schemes such as SHDF (Social Housing Decarbonisation Fund) and Sustainable Warmth. Committed funding has substantially increased across all these schemes, with funding recipients now better educated in how and where they can deploy funds, with Dyson acting as both main contractor as well as sub-contractor.
The directors are encouraged by the improvement in the company’s financial performance and continue to see significant organic growth opportunities afforded by the drive to improve the energy efficiency of homes in both the private and nonprivate domestic markets.
Turnover for the year ended March 2024 was £28.8m (March 2023: £26.7m). The company reported a profit before tax for the year of £3.3m (March 2023: £2.6m). The business performed strongly during the year reporting both record sales and profit, for the third consecutive year.
The year under review was one of consolidation, with year-on-year turnover growth of 8%. Margins were generally maintained, with industry related price increases and general inflationary cost increases being mitigated by CPI (Consumer Price Index) or equivalent uplifts, afforded in the company’s social housing contracts.
With ambitious organic growth plans, the company manged to secure new contracts in the period, with a combined contracted value of £46m. In addition, the company also secured extensions to 2 of its major contracts securing future order book values of £20m+. Post year end the company has continued to be successful in winning new work, with further contracts secured with a combined order value of £19m. The company now has a significant geographic footprint across the UK and an order book in excess of £100m.
Gas Call’s trading subsidiary WRB Gas (Contracts) Limited, continued to perform well during the period under review with turnover growth of 21%.
The directors are encouraged by the results for the year. The company has strong visibility of revenues for the next 12 months and beyond. The company has the desire, financial strength, and market awareness to further grow the business via acquisition and continues to look for suitable opportunities which will complement the existing business.
There are several potential risks and uncertainties which could have a material impact on the Group and its financial performance. There are no specific material uncertainties of which we are aware other than those identified, monitored and reported at board level and shown below:
Market and regulatory conditions – Energy Services are exposed to changes in the level of activity from its core customer base and from its customers’ Regulator (under ECO), OFGEM, which in turn is affected by Government Policy. Gas Services operate predominately in the social housing market. Potential changes in how these organisations obtain their funding could impact on annual budgetary spend. Revenues are however projected to some extent due to the legislative nature of some of the work undertaken. The general economic climate and both business and consumer confidence could also affect the businesses adversely.
Competition – The Group companies have strong reputations in their respective markets. Both markets are however competitive and low competitor pricing, sometimes to unsustainable levels, could potentially erode margins.
Implications of the UK Exit from the European Market – The impact of Brexit, the formal exit from the European Market continues to impact on both the energy services and gas services markets. Whilst the Group operates entirely in the UK and manufacturing of its core materials are also UK based further impact on supply chain is difficult to assess at this time.
Quality, health and safety – The Group companies operate in regulated industry sectors and are contractually obligated to operate its businesses in defined ways. Not complying with set processes would expose the business to fines and potential losses arising from such a breach. To mitigate, the Group companies undertake a risk assessment process prior to all installations and a pre- and post-installation inspections are also carried out.
Debt – The Group operates with the support of asset backed finance agreements (“ABFA”) as well as external support from its shareholders. It must therefore manage the potential interest rate risks, counter-party credit risk and operate within its facilities/lending agreements. The support provided by the Group’s shareholders remains of vital importance in allowing the Company to manage these risks.
Working capital and cash management - Management of working capital is fundamental to maintaining adequate head room under the Group’s ABFA and allowing the Company to trade with its supplier base/stakeholders.
In the financial year, the Group reported sales of £56.6m (2023: £46.6m). The consolidated profit before tax is £5.2m (2023: £1.6m).
A summary of the Group's key performance indicators is set out below:
2024 2023
£'000 £'000
Sales 56,536 46,619
Net profit before tax 5,224 1,572
Net current assets 5,910 2,477
Net assets 8,323 4,542
Average employee numbers 431 406
Future developments
The directors are encouraged by the strong pipeline and organic growth opportunities in both of its major markets. The Group continues to explore acquisition opportunities in the energy efficiency and contracting sectors where it can create greater scale in its operations and bring technology to the acquired businesses to improve efficiency and margins. The outlook for the next 12 months is viewed with cautious optimism.
Decarbonisation policy/plan
DGL remains committed to reducing its impact on the environment through the work we do. The Group has already created a carbon reduction plan in line with the UK Government PPN 06/21 requirement that outlines Duality’s current position and future plan.
In addition, DGL will assess its entire supply chain and eventually measure and reduce its carbon impact via the use of the Greenhouse Gas (GHG) protocol Scopes, 1, 2 and 3 methodologies. The Group understands that this will take considerable time and effort but recognises that this is essential for the business. Duality will, in due course, work towards becoming a Net Zero Carbon (NZC) business before the 2050 deadline and will commit to targeted carbon reductions once a baseline assessment is complete. The Group views the matter seriously and has committed resource to achieve these aims.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2024.
The results for the year are set out on page 10.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The Group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the Group's performance.
There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the Company's performance.
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the Group continues and that the appropriate training is arranged. It is the policy of the Group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
See note 26 for details of post balance sheet events.
DSG resigned as auditor on 11 September 2024. DSG Audit were appointed on 11 September 2024 to the Group 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.
We have audited the financial statements of Duality Group Limited (the ''parent company'') and its subsidiaries (the ''Group'') for the year ended 31 March 2024 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group 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).
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 Group and parent 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 Group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
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.
In the light of the knowledge and understanding of the Group and the parent company and their 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the directors' 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 parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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.
Discussions were held with, and enquiries made of, management and those charged with governance with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the Group.
The following laws and regulations were identified as being of significance to the Group:
Those laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, Company Law, Tax and Pensions legislation.
Those laws and regulations for which non-compliance may be fundamental to the operating aspects of the companies within the Group and therefore may have a material effect on the financial statements include compliance with Health and Safety, Building Regulations Act 2010, PAS (Publicly Available Specification) 2035, Gas (Safety) Installation and Use Regulations 1998.
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: enquiries of management and those charged with governance as to whether the Group complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; testing the appropriateness of entries in the nominal ledger, including journal entries; reviewing transactions around the end of the reporting period; and the performance of analytical procedures to identify unexpected movements in account balances which may be indicative of fraud.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the Group’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
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.
Use of our report
This report is made solely to the parent 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 parent 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 parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £329,242 (2023 - £74,290 loss).
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
Duality Group Limited (“the Company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Norfolk House, 13 Southampton Place, London, WC1A 2AJ.
The Group consists of Duality Group Limited and all of its subsidiaries. The principal activity of the Group and subsidiaries is disclosed in the strategic report.
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 £ '000.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties. The principal accounting policies adopted are set out below.
The Company is a qualifying entity for the purposes of FRS 102, being a member of a Group where the parent of that Group prepares publicly available consolidated financial statements, including this Company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group. The Company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 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.
The consolidated group financial statements consist of the financial statements of the parent company Duality Group Limited together with all entities controlled by the parent company (its subsidiaries) and the Group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 March 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
The directors are required to assess the ability of the Group to continue as a going concern, for a period of at least 12 months from the date of approval of the financial statements.
The Group has reviewed and continues to review the risks to the business in making their going concern assessment, the directors have prepared and considered financial forecasts for the following 12 months. The directors have conducted sensitivity analysis on these forecasts and have considered the impact of worst -case scenarios.
Based on the outcome of this analysis and the accompanying cash flow forecasts, the directors believe that there will be sufficient funds available to the Group to meet its obligations over the next 12 months. This, in conjunction with now being part of a significantly larger Group and its commitment to the Duality Group, leads the directors to believe that it is appropriate that the Group continues to operate as a going concern.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the Group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
The Group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the Group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest 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, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the Group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future 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.
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.
Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the Group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the Group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the Company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
In the application of the Group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The whole of turnover is attributable to the principal activity of the Group.
The average monthly number of persons (including directors) employed by the Group and Company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2023: 3).
The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £Nil (2023: £Nil).
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:
Amortisation on intangible assets is charged to administrative expenses.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Details of the Company's subsidiaries at 31 March 2024 are as follows:
* Companies that are entitled to and have taken advantage of the exemption from audit available under Section 479A of the Companies Act 2006 relating to subsidiary companies. In order for the subsidiary to claim this exemption the parent company must guarantee all outstanding liabilities that the subsidiary is subject to at the year end under S479C.
An impairment loss of £nil (2023: £nil) was recognised in cost of sales against stock during the year due to slow-moving and obsolete stock.
Amounts due from subsidiary undertakings are charged interest at market rate and are due on demand.
An impairment loss of £63k (2023: £142k) was recognised against trade debtors.
Other loans are secured by a fixed charge over a property owed by the parent company.
Amounts owed to Group undertakings are unsecured, interest free and are repayable on demand.
The asset backed financing arrangement is secured by a fixed and floating charge over the current and future assets of the Group. The directors provided personal guarantees totalling £150,000 (2023: £150,000) in favour of Independent Growth Finance Limited, the provider of the facility. these guarantees were discharged in October 2022.
Obligations under finance lease and hire purchase contracts are secured on the assets to which they relate.
Shareholder loan accounts have been included within other creditors. The directors have received written confirmation that whilst the shareholder loans are due on demand, they will not be called upon for repayment within 12 months from the date or approval of the financial statements. The loans accrue interest at market equivalent rate of 5%.
Obligations under finance lease and hire purchase contracts are secured on the assets to which they relate.
A company within the Group obtained a £1,000k loan with IGF; the balance at 31 March 2024 amounted to £528k. The loan is being repaid in monthly instalments of £28k plus interest. Interest was payable at a rate of 7% per annum above the applicable rate. The loan was repaid in full post year-end.
A company within the Group obtained a £700k loan with IGF; the balance at 31 March 2024 amounted to £601k The loan is being repaid in monthly instalments of £6k plus interest. Interest was payable at a rate of 3.95% per annum above the applicable rate. The loan was repaid in full post year-end.
A company within the Group obtained a bounce back loan of £50k from Royal Bank of Scotland. The loan is being repaid over a five year period with monthly repayments of £0.8k. The loan is due for repayment in 2025.
A company within the Group obtained a £1,000k loan with IGF; the balance as at 31 March 2024 amounted to £528k. The loan is being repaid in monthly instalments of £28k plus interest. Interest was payable at a rate of 7% per annum above the applicable rate. The loan was repaid in full post year-end.
Finance lease payments represent rentals payable by the Company or Group 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 to 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The provision recognised at 31 March 2024 totalling £133k (2023: £133k) is held in respect of potential liabilities for ongoing legal claims relating to cavity wall insulation. Management have calculated the provision in accordance with FRS 102 section 21 based on previous third party evidence and taking into account current market conditions.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax liability set out above is expected to reverse within 12-24 months and relates to the utilisation of tax losses against future expected profits of the same period.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the Group in an independently administered fund. Contributions totalling £94k (2023: £73k) were payable to the fund at the reporting date and are included in creditors.
All shares rank pari passu in relation to dividends, voting rights and any payments made on winding up.
At the reporting end date the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
On the 8 April 2024, Duality Group Limited, sold 100% of its ordinary share capital to Cap10 4NetZero Bidco Limited. The ultimate parent company is Cap10 Partners Holdco Limited. The ultimate controlling party is Fabrice Nottin.
The directors believe that joining the Sureserve Group strengthens the Group’s position in both the heating and the insulation and renewable energy sectors, bringing wider opportunities in both markets as well providing substantial financial backing, in support of the Group’s future acquisition growth aspirations.
During the year shareholders S Maclean, M Holmes, A Byrne and M Donnelly had loans due to the Company totalling £1,929,330 (2023: £491,230) with balances of £1,175,241, £369,100, £383,837 and £1,152 respectively (2023: £80,204, £257,536, £153,463 and £nil respectively). The balance is included within other debtors within debtors due within 1 year. The shareholders remain supportive of the business.
The Group hires vehicles from Commercial Fleet Rentals Limited, a company owned by a close family member of one of the directors. During the year the Group hired vehicles from Commercial Fleet Rentals Limited for £1,098,000 (2023: £870,000). Amounts outstanding at the year end, included within creditors, is £41,000 (2023: £2,000).
The Group engages Intelihome (UK) Ltd for services. M Donnelly is a director of both companies. During the year, the Group paid for services for £267,000 (2023: £257,000). Amounts outstanding at the year end, included within creditors is £1,000 (2023: £34,000).