Company registration number 08182935 (England and Wales)
ARAN INSULATION LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
ARAN INSULATION LIMITED
COMPANY INFORMATION
Directors
Mrs C Bacon
Mr M D Randall
Mr C A Thomson
Company number
08182935
Registered office
1-6 The Old Station
Higham
Bury St Edmunds
IP28 6NE
Auditor
Ensors Accountants LLP
Saxon House
Moseley's Farm Business Centre
Fornham All Saints
Bury St Edmunds
IP28 6JY
Business address
1-6 The Old Station
Higham
Bury St Edmunds
IP28 6NE
ARAN INSULATION LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
13 - 25
ARAN INSULATION LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -

The directors present the strategic report for the year ended 31 March 2024.

Review of the business

The directors are pleased with the results for the year which showed turnover increase to £12.5m (2023 £10.4m) and profit before tax increasing to £1.43m (2023 £315k). This was achieved through the efficient delivery of government funded schemes, building strong relationships with councils and social housing providers, and improved staff retention. The directors are optimistic about the continuing growth opportunities and anticipate further increases to turnover and profits for the company in 2024/25.

 

The company has scaled its operations over the year, to meet the growing demand for whole house retrofit services, investing in additional resources to ensure projects are delivered on time and within budget. The company has also improved operational efficiency by automating an increasing number of administrative tasks and enhancing its supply chain management.

 

At the year end, Shareholders funds totalled £2,233,697 (2023: £1,164,180) and Bank balances stood at £826,612 (2023: £623,224)

Principal risks and uncertainties

The key business risks and uncertainties affecting the company are considered to be the following:

 

 

 

 

 

ARAN INSULATION LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
Development and performance

The Directors are very optimistic about the current trading year. There has been a substantial number of new funded programs of work, which have taken time to bed in and commence, but which are now operating well. The company has expanded the range of energy efficiency measures it installs and has been installing an increasing number of renewable measures such as, solar PV systems and air source heat pumps, as well as a wide range of insulation measures, to improve housing stock and reduce carbon emissions. The future for the company over the coming years continues to be strong due to increased Government support for energy efficiency and commitment to carbon net zero by 2050.

 

The directors consider adequate finance is available to take advantage of business opportunities as they arise, whilst aiming to remain competitive in existing markets.

 

Future Developments

 

Future policy for the period 2025 – 2028 provides a positive outlook for the company.

 

New Government Schemes:

Warm Homes Local Grant: The introduction of this scheme in 2025 presents a significant growth opportunity for the company to deliver measures which focus on energy performance upgrades for low-income households. Warm Homes Social Housing Fund: With social housing providers now required to meet higher energy performance standards, the company can expect an increase in demand for its services from housing associations and local authorities.

 

Geographic Expansion:

The company intends to expand its operations beyond its current regional strongholds. By forming partnerships with local authorities across more regions of the UK, the company aims to secure a wider number of large-scale contracts, particularly in areas with high levels of fuel poverty.

 

Strengthening Subcontractor Relationships:

To meet the increased demand from government schemes, the company plans to onboard more subcontractors while ensuring strict quality control measures remain in place. Enhanced subcontractor training programs will be introduced to maintain compliance with new standards and ensure that project quality is upheld.

 

Key performance indicators

The key financial performance indicators are considered to be turnover and gross profit margin. Given the straightforward nature of the business, the directors are of the opinion that further analysis of key performance indicators is not necessary in understanding the development, performance or position of the business.

On behalf of the board

Mr M D Randall
Director
22 October 2024
ARAN INSULATION LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -

The directors present their annual report and financial statements for the year ended 31 March 2024.

Principal activities

The principal activity of the company are the installation of insulation, heating and renewable energy measures to domestic and commercial customers to reduce customer fuel bills and reduce CO2 emissions, with a significant focus on delivery of schemes on behalf of Social Landlords and Local Authorities.

 

Results and dividends

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

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

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

Mrs C Bacon
Mr M D Randall
Mr C A Thomson
Financial instruments
Liquidity risk

The directors have ultimate responsibility for liquidity risk management in maintaining adequate reserves, banking facilities and reserve borrowing facilities. They do this by continuously monitoring forecasts and actual cash flows and matching the maturity profits of financial assets and liabilities.

 

Credit risk

The company is at risk of its customers defaulting in making payments for services that have been supplied to them. To minimise the risk the company has a policy of prior payment before fulfilment or giving credit to customers who have demonstrated creditworthiness. To determine previous creditworthiness the company makes use of independent rating agencies, other publicly available financial information and its own trading records.

 

Cash flow risk

The ability to meet all future business commitments is dependent on monitoring of the group's cash position and on meetings all its secured obligations. Current and future cash requirements are monitored on a regular basis.

Auditor

The auditor, Ensors Accountants LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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.

ARAN INSULATION LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
On behalf of the board
Mr M D Randall
Director
22 October 2024
ARAN INSULATION LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 5 -

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

 

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

 

 

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

ARAN INSULATION LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF ARAN INSULATION LIMITED
- 6 -
Opinion

We have audited the financial statements of Aran Insulation Limited (the 'company') for the year ended 31 March 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

 

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

 

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

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

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.

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

 

Our audit was designed to include tests of detail together with an assessment of the control environment to enable us to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement due to fraud. This included work on areas where we consider there is a higher risk of fraud including transactions with related parties, revenue recognition and management override of systems and control and accounting estimates.

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

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:

 

 

However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.

 

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 company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.

Christopher Barrett
Senior Statutory Auditor
For and on behalf of Ensors Accountants LLP
23 October 2024
Chartered Accountants
Statutory Auditor
Saxon House
Moseley's Farm Business Centre
Fornham All Saints
Bury St Edmunds
IP28 6JY
ARAN INSULATION LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
12,457,364
10,375,729
Cost of sales
(8,281,791)
(7,638,078)
Gross profit
4,175,573
2,737,651
Administrative expenses
(2,880,784)
(2,577,033)
Other operating income
157,017
182,093
Operating profit
4
1,451,806
342,711
Interest receivable and similar income
6
439
27
Interest payable and similar expenses
7
(24,143)
(27,287)
Profit before taxation
1,428,102
315,451
Tax on profit
8
(358,685)
(43,684)
Profit for the financial year
1,069,417
271,767

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

ARAN INSULATION LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
9
478,242
302,186
Current assets
Stocks
10
110,137
99,854
Debtors
11
3,403,108
3,074,797
Cash at bank and in hand
826,612
623,224
4,339,857
3,797,875
Creditors: amounts falling due within one year
12
(2,434,984)
(2,745,592)
Net current assets
1,904,873
1,052,283
Total assets less current liabilities
2,383,115
1,354,469
Creditors: amounts falling due after more than one year
13
(50,605)
(147,422)
Provisions for liabilities
Deferred tax liability
16
98,813
42,767
(98,813)
(42,767)
Net assets
2,233,697
1,164,280
Capital and reserves
Called up share capital
18
100
100
Profit and loss reserves
2,233,597
1,164,180
Total equity
2,233,697
1,164,280

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 23 October 2024 and are signed on its behalf by:
Mrs C  Bacon
Mr M D Randall
Director
Director
Company registration number 08182935 (England and Wales)
ARAN INSULATION LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 April 2022
100
892,413
892,513
Year ended 31 March 2023:
Profit and total comprehensive income
-
271,767
271,767
Balance at 31 March 2023
100
1,164,180
1,164,280
Year ended 31 March 2024:
Profit and total comprehensive income
-
1,069,417
1,069,417
Balance at 31 March 2024
100
2,233,597
2,233,697
ARAN INSULATION LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
- 12 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
1,072,050
244,174
Interest paid
(24,143)
(27,287)
Income taxes paid
(244,940)
(40,597)
Net cash inflow from operating activities
802,967
176,290
Investing activities
Purchase of tangible fixed assets
(380,763)
(39,714)
Proceeds from disposal of tangible fixed assets
59,271
31,657
Interest received
439
27
Net cash used in investing activities
(321,053)
(8,030)
Financing activities
Repayment of borrowings
(243,940)
(106,060)
Payment of finance leases obligations
(34,586)
(102,668)
Net cash used in financing activities
(278,526)
(208,728)
Net increase/(decrease) in cash and cash equivalents
203,388
(40,468)
Cash and cash equivalents at beginning of year
623,224
663,692
Cash and cash equivalents at end of year
826,612
623,224
ARAN INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 13 -
1
Accounting policies
Company information

Aran Insulation Limited is a private company limited by shares incorporated in England and Wales. The registered office is 1-6 The Old Station, Higham, Bury St Edmunds, IP28 6NE. The company's registered number is 08182935.

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:

 

 

The financial statements of the company are consolidated in the financial statements of Aran Group Holdings Limited. These consolidated financial statements are available from its registered office, 1-6 The Old Station, Higham, Bury St Edmunds, IP28 6NE.

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.

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.

ARAN INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -

Revenue from rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. Where the outcome cannot be reliably estimated, revenue is recognised only to the extent that expenses recognised are recoverable.

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:

Leasehold improvements
20% straightline
Plant and equipment
33% straight line
Fixtures and fittings
25% straight line
Motor vehicles
25% - 33% straight line

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.

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 the cost of getting them to their current condition and location.

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.

ARAN INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
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.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

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

 

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

 

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

Derecognition of financial assets

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

Classification of financial liabilities

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

ARAN INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 16 -
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.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

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

1.9
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.10
Taxation

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

Current tax

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

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

ARAN INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 17 -
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.

1.14
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Amounts recoverable on contracts

A key accounting estimate has been identified in regard to amounts recoverable on contracts. Management consider the contract amount completed as at the year end and deduct the amount invoiced up to the year end and the remainder should be the amount recoverable. There is a high level of estimation in relation to some balances and these often change with additional work being added on.

ARAN INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 18 -
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Installation of insulation, heating and renewable energy measures
12,457,364
10,375,729
2024
2023
£
£
Turnover analysed by geographical market
UK
12,457,364
10,375,729
2024
2023
£
£
Other revenue
Interest income
439
27
Miscellaneous income
28,246
-
Recharges to related companies
128,771
182,093
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
17,575
15,000
Depreciation of owned tangible fixed assets
91,012
101,360
Depreciation of tangible fixed assets held under finance leases
64,000
58,730
(Profit)/loss on disposal of tangible fixed assets
(9,576)
6,398
Operating lease charges
9,566
5,000
5
Employees

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

2024
2023
Number
Number
Production
22
24
Admin
34
32
Total
56
56
ARAN INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
5
Employees
(Continued)
- 19 -

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
2,186,289
2,020,420
Social security costs
225,170
212,766
Pension costs
44,977
43,170
2,456,436
2,276,356
6
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
439
27
7
Interest payable and similar expenses
2024
2023
£
£
Other interest on financial liabilities
11,206
22,293
Interest on finance leases and hire purchase contracts
12,937
4,994
24,143
27,287
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
302,639
88,943
Adjustments in respect of prior periods
-
0
(20,464)
Total current tax
302,639
68,479
Deferred tax
Origination and reversal of timing differences
56,046
(24,795)
Total tax charge
358,685
43,684
ARAN INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
8
Taxation
(Continued)
- 20 -

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
Profit before taxation
1,428,102
315,451
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
357,026
59,936
Tax effect of expenses that are not deductible in determining taxable profit
1,692
12,196
Adjustments in respect of prior years
-
0
(20,464)
Permanent capital allowances in excess of depreciation
-
0
(2,136)
Deferred tax adjustments
-
0
(5,925)
Rounding
-
0
(1)
Other adjustments
(33)
78
Taxation charge for the year
358,685
43,684
9
Tangible fixed assets
Leasehold improvements
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 April 2023
-
0
34,057
78,637
533,236
645,930
Additions
35,703
12,700
7,312
325,048
380,763
Disposals
-
0
(6,000)
-
0
(118,495)
(124,495)
At 31 March 2024
35,703
40,757
85,949
739,789
902,198
Depreciation and impairment
At 1 April 2023
-
0
27,622
33,300
282,822
343,744
Depreciation charged in the year
558
6,499
20,153
127,802
155,012
Eliminated in respect of disposals
-
0
(5,280)
-
0
(69,520)
(74,800)
At 31 March 2024
558
28,841
53,453
341,104
423,956
Carrying amount
At 31 March 2024
35,145
11,916
32,496
398,685
478,242
At 31 March 2023
-
0
6,435
45,337
250,414
302,186
ARAN INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
9
Tangible fixed assets
(Continued)
- 21 -

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

2024
2023
£
£
Motor vehicles
74,829
125,591
10
Stocks
2024
2023
£
£
Finished goods and goods for resale
110,137
99,854
11
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,326,788
1,863,229
Gross amounts owed by contract customers
1,729,957
949,930
Amounts owed by group undertakings
79,369
-
0
Other debtors
104,917
123,898
Prepayments and accrued income
162,077
137,740
3,403,108
3,074,797
12
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
15
17,127
71,563
Other borrowings
14
-
0
127,273
Trade creditors
853,666
883,992
Amounts owed to group undertakings
730,645
119,913
Corporation tax
144,254
86,555
Other taxation and social security
70,921
58,442
Other creditors
65,357
1,214,416
Accruals and deferred income
553,014
183,438
2,434,984
2,745,592
ARAN INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
12
Creditors: amounts falling due within one year
(Continued)
- 22 -

Amounts due under hire purchase contracts totals £17,127 (2023: £71,563), this amount is secured by a charge over the assets concerned.

 

Included in Other Creditors is £26,750 (2023: £1,157,000) which is secured by way of a fixed and floating charge over the assets of the company to the benefit of IGF Business Credit Limited. There is also a Cross Guarantee and Debenture in place between the company, a fellow group subsidiary, the immediate parent company and the ultimate parent company, in respect of this amount.

 

In connection with the above, at the year end, the company cross-guaranteed a total amount of £5,341 (2023:£71,396) in respect of other group companies. This amount is not included in the company's balance sheet.

 

In Other Borrowings was a loan balance of £Nil (2023: £127,273) which was secured by way of a fixed and floating charge over the assets of the company. This loan was repaid during the financial year.

13
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under finance leases
15
50,605
30,755
Other borrowings
14
-
0
116,667
50,605
147,422

Amounts due under hire purchase contracts totals £50,605 (2023: £30,755), this amount is secured by a charge over the assets concerned.

 

In Other Borrowings, was a loan balance of £nil (2023: £116,667) which is secured by way of a fixed

and floating charge over the assets of the company. This was repaid during the financial year.

 

14
Loans and overdrafts
2024
2023
£
£
Other loans
-
0
243,940
Payable within one year
-
0
127,273
Payable after one year
-
0
116,667

The company has repaid this loan in the financial year.

ARAN INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 23 -
15
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
17,127
71,563
In two to five years
50,605
30,755
67,732
102,318

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 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

16
Deferred taxation

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

Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
101,133
44,923
Other
(2,320)
(2,156)
98,813
42,767
2024
Movements in the year:
£
Liability at 1 April 2023
42,767
Charge to profit or loss
56,046
Liability at 31 March 2024
98,813

The deferred tax liability set out above is expected to reverse within [12 months] and relates to accelerated capital allowances that are expected to mature within the same period.

17
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
44,977
43,170

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.

ARAN INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
17
Retirement benefit schemes
(Continued)
- 24 -

The pension commitment of the company, included in Creditors at the balance sheet date, amounted to £11,251 (2023: £9,134).

18
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
100
100
100
100

The company has one class of ordinary shares which carry no rights to fixed income. Each ordinary share ranks pari passu in regards to voting rights and dividends.

19
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:

2024
2023
£
£
as restated
Within one year
126,829
89,488
Between two and five years
315,521
294,718
442,350
384,206
20
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Sales
Sales
Purchases
Purchases
2024
2023
2024
2023
£
£
£
£
Other related parties
41,409
-
0
268,578
-
2024
2023
Amounts due to related parties
£
£
Other related parties
1,409
-
ARAN INSULATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
20
Related party transactions
(Continued)
- 25 -

The following amounts were outstanding at the reporting end date:

2024
2023
Amounts due from related parties
£
£
Other related parties
24,327
-
21
Ultimate controlling party

The immediate parent company is considered to be Aran Energy Holdings Limited, a company registered in England and Wales.

 

The ultimate parent company is considered to be Aran Group Holdings Limited, a company also registered in England and Wales. Aran Group Holdings Limited is the parent of both the smallest and largest group preparing consolidated financial statements which include the results of Aran Insulation Limited. Copies of the Aran Group Holdings Limited consolidated financial statements are available from its registered office, 1-6 The Old Station, Higham, Bury St Edmunds, IP28 6NE.

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