Company registration number 06558300 (England and Wales)
NOVAFLEX LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
PAGES FOR FILING WITH REGISTRAR
NOVAFLEX LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 10
NOVAFLEX LIMITED
BALANCE SHEET
AS AT
31 JANUARY 2024
31 January 2024
- 1 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
4
493,789
371,311
Current assets
Stocks
1,269,130
1,322,988
Debtors
5
355,924
491,786
Cash at bank and in hand
45,403
40,697
1,670,457
1,855,471
Creditors: amounts falling due within one year
6
(7,058,958)
(7,206,357)
Net current liabilities
(5,388,501)
(5,350,886)
Net liabilities
(4,894,712)
(4,979,575)
Capital and reserves
Called up share capital
1
1
Profit and loss reserves
(4,894,713)
(4,979,576)
Total equity
(4,894,712)
(4,979,575)

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the board of directors and authorised for issue on 14 October 2024 and are signed on its behalf by:
M Donnelly
Director
Company registration number 06558300 (England and Wales)
NOVAFLEX LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
- 2 -
1
Accounting policies
Company information

Novaflex Limited is a private company limited by shares incorporated in England and Wales. The registered office is 6 Abbots Quay, Monks Ferry, Birkenhead, Wirral, CH41 5LH.

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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

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.

1.2
Going concern

Due to the on-going support made available to Novaflex Limited by Z-Flex (Canada) Inc (the entity's parent company) and the group of companies it forms part, the directors have truea 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.

 

A letter of support has been received by the company from Z-Flex (Canada) Inc, and the group of companies it forms part, which confirms that it is their intention to continue providing adequate support. At 31st January 2024, balances owed to group entities amounted to £6,618,186.

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.

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
Over the life of the lease
Plant and equipment
20% on reducing balance
Fixtures and fittings
20% on reducing balance
Computers
33% on cost
NOVAFLEX LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 3 -

Assets under construction are not depreciated until such time as the related assets are complete and fully in use, after which point depreciation is charged in order to write the cost off over the estimated useful life of the constructed asset.

 

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.

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.

NOVAFLEX LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 4 -
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.

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.

NOVAFLEX LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 5 -
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.

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
Leases

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

1.13
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.

1.14

Exceptional items disclosure

Items which are deemed as outside the normal activity of the company, or so material are classified as exceptional items. Exceptional items are disclosed separately on the Profit and Loss Account, and its related notes.

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.

NOVAFLEX LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 6 -
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.

Useful economic lives of assets

Tangible assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of assets and the residual values are assessed annually and may vary depending on a number of factors.

Debtors provision

Trade debtors are recorded at their recoverable value. The recoverability of the debtors are subject to various external influences.

Stock provision

Stock is recognised at the lower of cost and net realisable value. The net realisable value of stock is subject to various external influences, management review many sources of information to determine the level of provisioning required.

3
Employees

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

2024
2023
Number
Number
Total
14
13
NOVAFLEX LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 7 -
4
Tangible fixed assets
Leasehold improvements
Assets under construction
Plant and equipment
Fixtures and fittings
Computers
Total
£
£
£
£
£
£
Cost
At 1 February 2023
6,195
34,680
1,018,336
26,767
10,027
1,096,005
Additions
-
0
-
0
245,105
722
598
246,425
Transfers
-
0
(34,680)
34,680
-
0
-
0
-
0
At 31 January 2024
6,195
-
0
1,298,121
27,489
10,625
1,342,430
Depreciation and impairment
At 1 February 2023
6,195
-
0
686,766
22,774
8,959
724,694
Depreciation charged in the year
-
0
-
0
122,271
943
733
123,947
At 31 January 2024
6,195
-
0
809,037
23,717
9,692
848,641
Carrying amount
At 31 January 2024
-
0
-
0
489,084
3,772
933
493,789
At 31 January 2023
-
0
34,680
331,570
3,993
1,068
371,311
5
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
290,617
401,889
Other debtors
65,307
89,897
355,924
491,786
6
Creditors: amounts falling due within one year
2024
2023
£
£
Bank loans and overdrafts
7,948
-
0
Trade creditors
203,114
137,037
Amounts owed to group undertakings
6,618,186
6,841,182
Taxation and social security
17,681
21,406
Other creditors
212,029
206,732
7,058,958
7,206,357
NOVAFLEX LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 8 -
7
Audit report information

As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:

The auditor's report was unqualified.

Senior Statutory Auditor:
Kris Philip Billington FCA
Statutory Auditor:
McEwan Wallace Limited
Date of audit report:
14 October 2024
8
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:

2024
2023
£
£
747,900
88,000
9
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
£
£
£
£
Entities with control, joint control or significant influence over the company
403,260
374,629
312,814
384,802
Management fee
Product development fee
2024
2023
2024
2023
£
£
£
£
Entities with control, joint control or significant influence over the company
72,000
72,000
225,000
225,000

The following amounts were outstanding at the reporting end date:

2024
2023
Amounts due to related parties
£
£
Entities with control, joint control or significant influence over the company
6,618,186
6,841,182
NOVAFLEX LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
9
Related party transactions
(Continued)
- 9 -

Due to large variations in exchange rates between Canadian and UK currencies, exchange profits of £266,204 were made in the year (2023 - exchange losses of £259,871), decreasing the Sterling equivalent value of inter-company loans owed by Novaflex Limited to the company's Canadian parent. These exchange profits have been treated as exceptional profits in the Profit and Loss account as in previous years due to their size and non-trading nature.

 

 

10
Going Concern

At 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.

 

The Company receives the on-going financial and operational support from the wider group of companies that it forms part of, and the directors of the company also control the wider group too. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

 

Amounts owed to related parties at 31st January 2024 are disclosed in note 9 of the financial statements and amount to £6,618,186 at the 2024 year end.

NOVAFLEX LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 10 -
11
Parent company

The intermediate controlling party is Z-Flex (Canada) Inc, by virtue of owning 100% of Novaflex Limited shares.

 

The ultimate controlling party is deemed to be the company's directors by virtue of their control over the group of companies of which Novaflex Limited forms part.

 

Z-Flex (Canada) Inc. is the smallest group entity which produces consolidated financial statements which Novaflex Limited forms part of.

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