Company Registration No. 03418561 (England and Wales)
Airco Refrigeration And Airconditioning Limited
Annual Report And Financial Statements
For The Year Ended 31 March 2021
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
COMPANY INFORMATION
Directors
Mr N Fisher
Mr C A Goodwin
Mr N D Oxtoby
Secretary
Mr T Davison
Company number
03418561
Registered office
Airco House
Goulton Street
Hull
HU3 4DL
Auditor
Azets Audit Services Limited
Triune Court
Monks Cross Drive
York
YO32 9GZ
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5
Directors' responsibilities statement
6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 31
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2021
- 1 -
The directors present the strategic report for the year ended 31 March 2021.
General review
We have had and continue to experience, double digit growth linked with geographical growth too. Our core services remain - Consultancy, installation, maintenance & repair of air conditioning refrigeration, plumbing, heating, and renewables.
Our consultancy ability has been strengthened by the introduction of a specialist designer/CAD operator and ventilation specialist both services we have previously outsourced.
Growth has been experienced in all sectors, and we have seen more high value projects land from a variety of clients, some existing and some new.
Delivery of our services and our back-office functions have further developed with adoption of greater automation and cloud hosted services. This step has allowed remote working capability and a more robust platform on which we can scale up with greater ease.
Government guidance on safe buildings and its incentives for renewables has stimulated growth along with the general shift, headed by larger corporations and government bodies, being taken to reduce their carbon footprints.
Suppliers have experienced some delays as a result of the world health situation and the container delays. The delays are manageable and rarely impact on delivery. Our field-based team has grown considerably to meet the demands. Fleet expenditure has risen in line with staff growth.
We have added several large clients on nationwide agreements, this does impact in both a positive and a negative way. On the positive side it allows us to grow the workforce and benefit from economies of scale. Negative impact is that the early stages of large fleets of assets demand more ‘front loaded’ admin and understanding.
Performance during the year
We consistently invoice over £1.2M every month now and cater for a variety of client billing platforms and with a variety of formats.
Our finance team are very adaptable and focused and manage debt with firm control and use automated reminder systems and paperless billing. Authorisation platforms have changed to both meet the growth in purchasing whilst ensuring approvals are routed strategically for audit and review.
R&D is recorded and managed each year, we also engage with a specialist R&D claims partner to ensure we claim correctly and accurately each year.
We have strong relationships with our banking partner and often review services and opportunities in line with our needs through the growth.
At year end we saw a healthy increase in net profits and a balance sheet which reflected the growth seen.
The board highlighted several strategic targets, crucially the local authority ASHP contract and additional housing partnership agreements as the team is strong and very effective in this sector.
By introducing a ventilation manager/designer, accompanied by a CAD specialist we have a portfolio of service which we can offer to all our clients.
The client spend is spread quite widely with no one client accounting for more than 15% of our income.
A good proportion of our business remains in the government sector which ensures reliable payments and often sooner than terms seen in the private sector.
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 2 -
Performance during the year (continued...)
The current larger clients, with significant spend include:
-
The Priory Group (Hospitals and care)
-
Mitie (FM giant)
-
Virgin Media Group
-
East Riding of Yorkshire Council
-
Chameleon Business interiors (long standing relationship)
-
Hyndburn Council
-
West Hertfordshire Hospitals Trust
-
Kcom & Nasstar ( telecoms group now dividing)
-
J Tomlinson (FM provider to local public sector services)
The order book is the strongest we have ever seen with a new record month in November 21, delivery of the orders will take place over the next 2/3 months.
Demand in our sector is still very strong and our size and coverage places us well to capitalize from this.
The Business monitors its department performance with KPI’s appropriate to each team.
The weekly sales review meeting includes:
-
reviews weekly, monthly, year to date and comparison on previous years
-
Nature of enquiries and volume against previous year
-
Strategic and tactical guidance from the Directors on significant opportunities
The quarterly Sales Review Covers:
The annual Sales plan Reviews and sets targets for:
Operational reviews are undertaken monthly to review
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 3 -
Performance during the year (continued...)
The Finance Team monitor and target:
-
Monthly invoice value
-
Work in Progress
-
Outstanding debt be period
-
Debtor days
-
Credit cards - spend and allocation
-
Stock and equipment allocation
The Operational Hubs monitor and target:
HR Monitor and report:
-
Absence
-
Training
-
H&S
-
Recruitment
-
Any Disciplinary actions
Risks and uncertainties
The industry is in high demand and there is no sign of this changing in the short term, but we should all be aware that legislation, changes in power generation and global government policy does impact our industry.
Renewables are growing rapidly, and we are aware that there are still huge opportunities but at some point that certain goods and services will be commoditized which is likely to reduce the capital values and the associated services.
Staffing remains challenging as demand still outstrips supply, this places an upward pressure on wages and conditions.
Transport costs are rising, this is reflected in both capital good pricing, spare parts and associated fixtures and fittings. Although some of this is passed on, we are conscious that there are some ‘all inclusive agreements’ which will demand close review when re-negotiated.
Our growth has attracted a growing number of Blue chip clients and we have had to compromise on some longer payment terms.
We do counter this wherever possible with staged payment plans, monthly or quarterly PPM payment plans and deposits with orders.
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 4 -
Other information and explanations
During this financial year Airco endured some major challenges:
-
On 4
th
July 2021 we were affected by the major Kaseya cyber attack, with the ransomware encrypting our server. After piecing the information back together, we made the decision to move from server based software to Microsoft Sharepoint which is cloud based. As a result of the hack we now have our sage and other accounting software held on a remote desktop for peace of mind.
Mr N Fisher
Director
15 March 2022
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2021
- 5 -
The directors present their annual report and financial statements for the year ended 31 March 2021.
Principal activities
The principal activity of the company continued to be that of refrigeration and air-conditioning installation, service and maintenance and related services.
Results and dividends
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £250,600. 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:
Mr N Fisher
Mr C A Goodwin
Mr N D Oxtoby
Auditor
Azets Audit Services Limited were appointed auditor to the company following their acquisition of the trade of Garbutt & Elliott Audit Limited on 1 December 2021. In accordance with s487(2) of the Companies Act 2006 they are deemed reappointed annually.
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.
On behalf of the board
Mr N Fisher
Director
15 March 2022
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2021
- 6 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
- 7 -
Opinion
We have audited the financial statements of Airco Refrigeration and Airconditioning Limited (the 'company') for the year ended 31 March 2021 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 FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 March 2021 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the
financial statements
section of our report. We are independent of the
company
in accordance with the ethical requirements that are relevant to our audit of the
financial statements
in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors'
r
eport 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.
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
- 8 -
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 identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, 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
.
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.
Extent to which the audit was considered capable of detecting irregularities, including fraud
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the
financial
statements from our general commercial and sector experience, through discussion with the directors
and other
management, and from inspection of the company's regulatory and legal correspondence. We
discussed with the
directors and other management the policies and procedures regarding compliance with laws
and regulations. We
communicated identified laws and regulations throughout our team and remained alert to
any indications of non-
c
ompliance during the audit.
The company is subject to laws and regulations that directly affect the financial statements including financial
reporting
legislation (including related companies legislation), distributable profits legislation, pensions legislation,
taxation legislation and further laws and regulations that could indirectly affect the financial statements,
comprising employment,
environmental and health and safety legislation and, in the current climate, covid
regulations. We assessed the extent of
compliance with these laws and regulations as part of our procedures on
the related financial statement items. Auditing
standards limit the required audit procedures to identify noncompliance
with these laws and regulations to enquiry of the
directors and other management and inspection of
regulatory and legal correspondence, if any. These procedures did
not identify any potentially material actual or
suspected non-compliance.
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
- 9 -
To identify risks of material misstatement due to fraud we considered the opportunities and incentives and
pressures
that may exist within the company to commit fraud. Our risk assessment procedures included: enquiry
of directors to
understand the high level policies and procedures in place to prevent and detect fraud, reading
Board minutes and
considering performance targets and incentive schemes in place for management. We
communicated identified fraud
risks throughout our team and remained alert to any indications of fraud during the
audit.
As a result of these procedures we identified the greatest potential for fraud in the following areas:
- revenue recognition and in particular the risk that revenue is recorded in the wrong period; and
- subjective accounting estimates.
These risks arise due to a desire to present stronger results which may enable the company to secure additional
finance, tender more favourably for contracts and management to benefit from enhanced incentives. As required
by
auditing standards we also identified and addressed the risk of management override of controls.
We performed the following procedures to address the risks of fraud identified:
- identifying and testing high risk journal entries through vouching the entries to supporting documentation; and
- assessing significant accounting estimates for bias; and
- testing the timing and recognition of turnover and, in particular, that it was appropriately recognised or deferred.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some
material misstatements in the financial statements, even though we have properly planned and performed our
audit in
accordance with auditing standards. For example, the further removed non-compliance with laws and
regulations is
from the events and transactions reflected in the financial statements, the less likely the inherently
limited procedures
required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve
collusion,
forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit
procedures are
designed to detect material misstatement. We are not responsible for preventing non-compliance
or fraud and cannot
be expected to detect non-compliance with all laws and regulations.
Other matters which we are required to address
In the previous accounting period the directors of the Company took advantage of audit exemption under s477 of
the Companies Act 2006. Therefore the prior period financial statements were not subject to audit.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Martin Davey (Senior Statutory Auditor)
For and on behalf of Azets Audit Services Limited
15 March 2022
Chartered Accountants
Statutory Auditor
Triune Court
Monks Cross Drive
York
YO32 9GZ
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2021
- 10 -
2021
2020
Unaudited
£
£
Turnover
3
12,257,883
10,560,047
Cost of sales
(8,531,381)
(7,223,605)
Gross profit
3,726,502
3,336,442
Administrative expenses
(3,314,521)
(2,866,772)
Other operating income
282,946
24,000
Operating profit
4
694,927
493,670
Interest receivable and similar income
7
171
5,545
Interest payable and similar expenses
8
(64,703)
(82,705)
Profit before taxation
630,395
416,510
Tax on profit
9
(127,871)
(19,528)
Total comprehensive income for the year
502,524
396,982
The profit and loss account has been prepared on the basis that all operations are continuing operations.
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
BALANCE SHEET
AS AT
31 MARCH 2021
31 March 2021
- 11 -
2021
2020
Unaudited
Notes
£
£
£
£
Fixed assets
Intangible assets
11
10,439
Tangible assets
12
1,851,175
1,362,723
Investment properties
13
360,500
360,500
Investments
14
30
30
2,211,705
1,733,692
Current assets
Stocks
15
1,262,774
682,764
Debtors
16
2,983,980
2,667,665
Cash at bank and in hand
228,915
205,295
4,475,669
3,555,724
Creditors: amounts falling due within one year
19
(3,578,020)
(3,226,145)
Net current assets
897,649
329,579
Total assets less current liabilities
3,109,354
2,063,271
Creditors: amounts falling due after more than one year
20
(1,744,511)
(1,041,352)
Provisions for liabilities
Deferred tax liability
21
135,000
44,000
(135,000)
(44,000)
Net assets
1,229,843
977,919
Capital and reserves
Called up share capital
23
10,000
10,000
Profit and loss reserves
1,219,843
967,919
Total equity
1,229,843
977,919
The financial statements were approved by the board of directors and authorised for issue on 15 March 2022 and are signed on its behalf by:
Mr N Fisher
Director
Company Registration No. 03418561
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2021
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2019
10,000
815,337
825,337
Year ended 31 March 2020 Unaudited:
Profit and total comprehensive income for the year
-
396,982
396,982
Dividends
10
-
(244,400)
(244,400)
Balance at 31 March 2020
10,000
967,919
977,919
Year ended 31 March 2021:
Profit and total comprehensive income for the year
-
502,524
502,524
Dividends
10
-
(250,600)
(250,600)
Balance at 31 March 2021
10,000
1,219,843
1,229,843
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2021
- 13 -
2021
2020
Unaudited
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
28
154,244
1,107,791
Interest paid
(64,703)
(82,705)
Income taxes paid
(53,778)
Net cash inflow from operating activities
89,541
971,308
Investing activities
Purchase of tangible fixed assets
(104,937)
(155,454)
Proceeds on disposal of tangible fixed assets
9,352
Interest received
171
5,545
Net cash used in investing activities
(104,766)
(140,557)
Financing activities
Proceeds of new bank loans
240,000
Repayment of bank loans
(47,294)
(61,092)
Payment of finance leases obligations
(123,261)
(88,430)
Dividends paid
(30,600)
(26,400)
Net cash generated from/(used in) financing activities
38,845
(175,922)
Net increase in cash and cash equivalents
23,620
654,829
Cash and cash equivalents at beginning of year
205,295
(449,534)
Cash and cash equivalents at end of year
228,915
205,295
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
- 14 -
1
Accounting policies
Company information
Airco Refrigeration and Airconditioning Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
Airco House, Goulton Street, Hull, HU3 4DL.
1.1
Accounting convention
These financial statements have been prepared in accordance with 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 a
mounts
in these financial statements are
rounded to the nearest
£1.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The company has taken advantage of Companies Act 2006 section 402, exempting the company from being required to prepare group accounts, on the basis that no subsidiary undertaking needs to be included in the consolidation. Under Companies Act 2006 section 404, the companies dormant subsidiary undertakings are excluded from being consolidated on the grounds of materiality.
1.2
Going concern
The directors have considered all factors, including
true
Covid-19 and
the wider economy, as part of their assessment of going concern. Although the current economic climate creates both cashflow and profitability risks for the company, the directors believe on balance that they have sufficient resources to enable trading to continue for a period of at least one year from the date of approval of the financial statements, on the basis of information currently available to them as at the point of approv
al
. Accordingly, these financial statements have been prepared on the going concern basis.
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 installation 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.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that
it is probable will be
recover
ed
.
Rental income
represents amounts receivable
in respect of the rent of properties,
net of VAT
, and is recognised on an accrued straight line basis over the period of occupation.
1.4
Research and development expenditure
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
.
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 15 -
1.5
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated
amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 5 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.6
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:
Freehold buildings
2% and 12.5% Straight line
Plant and machinery
20-50% Straight line
Fixtures and Fittings
20% Straight line
Motor vehicles
20 - 25% Straight line basis
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
.
Freehold land is not depreciated.
1.7
Investment properties
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure
. Subsequently it is measured
at fair value a
t
the reporting end date.
The surplus or deficit on revaluation is recognised in the profit and loss account.
1.8
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
The investments are assessed for impairment at each reporting date
and
any
impairment
losses or reversals of impairment losses are recognised immediately in
profit
or
loss
.
A subsidiary is an entity controlled by the company
. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
1.9
Impairment of fixed assets
At each reporting
period
end date, the
company
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.
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 16 -
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.
1.10
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.
1.11
Construction contracts
Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.
When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.
Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs if the contract is obtained in a subsequent period.
The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 17 -
1.12
Cash at bank and in hand
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.13
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.
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 18 -
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
and
loans from
fellow group companies, 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
paymen
ts 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. A
m
ounts 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.
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
s
ubsequently 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 th
r
ough 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.
1.14
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.
1.15
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.
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 19 -
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.
1.16
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.
1.17
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.18
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 lease
s
asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 20 -
1.19
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
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.
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.
Stock valuation
Stocks are valued at the lower of cost and estimated selling price less costs to complete and sell, as noted in accounting policy 1.10.
The company
's stock valuation is based on the experience and knowledge of management, and their in depth knowledge of the cost of their goods. They make suitable provision as necessary to provide for aging and refitted stock.
Depreciation
The depreciation policy has been set according to management's experience of the useful lives of a typical
asset in each category, something which is reviewed annually. It is not considered practical to use a per
unit basis to allocate depreciation without undue cost and therefore amounts are charged annually. The
depreciation charged during the year was £352,481 (2020 - £299,428) which the directors feel is a fair
reflection of the benefits derived from the consumption of the tangible fixed assets in use during the period.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2021
2020
Unaudited
£
£
Turnover analysed by class of business
Sales of goods and installations
9,303,627
7,326,988
Sales of services and maintance
2,954,256
3,233,059
12,257,883
10,560,047
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
3
Turnover and other revenue
(Continued)
- 21 -
2021
2020
Unaudited
£
£
Turnover analysed by geographical market
UK
12,257,883
10,560,047
2021
2020
Unaudited
£
£
Other significant revenue
Interest income
171
5,545
Grants received
258,946
4
Operating profit
2021
2020
Unaudited
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(258,946)
Fees payable to the company's auditor for the audit of the company's financial statements
9,600
Depreciation of owned tangible fixed assets
112,508
246,428
Depreciation of tangible fixed assets held under finance leases
239,973
53,000
Profit on disposal of tangible fixed assets
(891)
Amortisation of intangible assets
10,439
10,437
Operating lease charges
24,698
13,990
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Unaudited
Number
Number
Directors
3
3
Cost of sales
109
90
Administration
24
20
Total
136
113
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
5
Employees
(Continued)
- 22 -
Their aggregate remuneration comprised:
2021
2020
Unaudited
£
£
Wages and salaries
4,012,319
3,206,673
Social security costs
405,853
298,807
Pension costs
71,076
53,973
4,489,248
3,559,453
6
Directors' remuneration
2021
2020
Unaudited
£
£
Remuneration for qualifying services
76,336
207,418
Company pension contributions to defined contribution schemes
1,170
2,897
77,506
210,315
7
Interest receivable and similar income
2021
2020
Unaudited
£
£
Interest income
Interest on bank deposits
171
5,545
8
Interest payable and similar expenses
2021
2020
Unaudited
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
26,018
38,547
Other finance costs:
Interest on finance leases and hire purchase contracts
38,685
42,686
Other interest
1,472
64,703
82,705
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 23 -
9
Taxation
2021
2020
Unaudited
£
£
Current tax
UK corporation tax on profits for the current period
29,871
52,793
Adjustments in respect of prior periods
7,000
(30,265)
Total current tax
36,871
22,528
Deferred tax
Origination and reversal of timing differences
91,000
(3,000)
Total tax charge
127,871
19,528
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:
2021
2020
Unaudited
£
£
Profit before taxation
630,395
416,510
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
119,775
79,137
Under provided in prior years
7,000
Other
1,096
(59,609)
Taxation charge for the year
127,871
19,528
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 24 -
10
Dividends
2021
2020
2021
2020
Unaudted
Unaudited
Per share
Per share
Total
Total
£
£
£
£
Ordinary 'A' Shares
Interim paid
15
14
145,000
138,000
Ordinary 'B' Shares
Interim paid
624
539
30,600
26,400
Ordinary 'C' Shares
Interim paid
75,000
80,000
75,000
80,000
Total dividends
Interim paid
250,600
244,400
11
Intangible fixed assets
Goodwill
£
Cost
At 1 April 2020 and 31 March 2021
286,894
Amortisation and impairment
At 1 April 2020
276,455
Amortisation charged for the year
10,439
At 31 March 2021
286,894
Carrying amount
At 31 March 2021
At 31 March 2020 (unaudited)
10,439
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 25 -
12
Tangible fixed assets
Freehold buildings
Plant and machinery
Fixtures and Fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 April 2020 (unaudited)
961,295
490,723
493,727
810,822
2,756,567
Additions
15,884
13,935
3,256
807,858
840,933
At 31 March 2021
977,179
504,658
496,983
1,618,680
3,597,500
Depreciation and impairment
At 1 April 2020 (unaudited)
187,427
374,347
379,376
452,694
1,393,844
Depreciation charged in the year
37,576
64,460
60,391
190,054
352,481
At 31 March 2021
225,003
438,807
439,767
642,748
1,746,325
Carrying amount
At 31 March 2021
752,176
65,851
57,216
975,932
1,851,175
At 31 March 2020 (unaudited)
773,868
116,376
114,351
358,128
1,362,723
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2021
2020
Unaudited
£
£
Plant and machinery
58,333
Fixtures and Fittings
32,500
51,250
Motor vehicles
1,182,181
281,695
Fixtures and fittings
37,571
61,613
1,252,252
452,891
13
Investment property
2021
£
Fair value
At 1 April 2020 and 31 March 2021
360,500
The property was professionally valued at the point of purchase on 31 March 2015 and the directors believe the value is not materially different at the balance sheet date.
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 26 -
14
Fixed asset investments
2021
2020
Unaudited
Notes
£
£
Investments in subsidiaries
27
30
30
15
Stocks
2021
2020
Unaudited
£
£
Work in progress
682,993
270,098
Finished goods and goods for resale
579,781
412,666
1,262,774
682,764
16
Debtors
2021
2020
Unaudited
Amounts falling due within one year:
£
£
Trade debtors
2,555,821
2,311,814
Corporation tax recoverable
25,666
Other debtors
398,417
323,839
Prepayments and accrued income
4,076
32,012
2,983,980
2,667,665
17
Loans and overdrafts
2021
2020
Unaudited
£
£
Bank loans
1,018,556
825,850
Payable within one year
100,674
70,017
Payable after one year
917,882
755,833
Bank loans are secured by fixed and floating charges over the freehold buildings and assets of the company and a personal guarantee as disclosed in note
26
.
The company holds 6 loans over varying repayment terms and interest rates
(Including a CBILS loan of £240,000)
.
T
he earliest repayable date is 31 May 2021 and the latest repayable date
is
31 August 2039. The interest rates on the loans vary between 2.73% over base rate per annum and 8.36% per annum.
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 27 -
18
Finance lease obligations
2021
2020
Unaudited
Future minimum lease payments due under finance leases:
£
£
Within one year
308,426
131,980
In two to five years
933,967
399,658
1,242,393
531,638
Less: future finance charges
(171,338)
(73,318)
1,071,055
458,320
Finance lease payments represent rentals payable by the company for certain items. 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 three years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
19
Creditors: amounts falling due within one year
2021
2020
Unaudited
Notes
£
£
Bank loans
17
100,674
70,017
Obligations under finance leases
18
244,426
172,801
Trade creditors
1,641,379
1,743,217
Corporation tax
160,537
98,000
Other taxation and social security
631,848
459,671
Other creditors
392,429
308,032
Accruals and deferred income
406,727
374,407
3,578,020
3,226,145
Bank loans and overdrafts are secured by fixed and floating charges over the freehold buildings and assets of the company and a personal guarantee as disclosed in note
26
.
Hire purchase and finance lease borrowings are secured against the assets to which they relate.
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 28 -
20
Creditors: amounts falling due after more than one year
2021
2020
Unaudited
£
£
Bank loans
17
917,882
755,833
Obligations under finance leases
18
826,629
285,519
1,744,511
1,041,352
Bank loans and overdrafts are secured by fixed and floating charges over the freehold buildings and assets of the company and a personal guarantee as disclosed in note 26
.
Hire purchase and finance lease borrowings are secured against the assets to which they relate.
Amounts included above which fall due after five years are as follows:
Payable by instalments
378,585
545,207
21
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
Unaudited
2021
2020
Balances:
£
£
Deferred tax
135,000
44,000
2021
Movements in the year:
£
Liability at 1 April 2020
44,000
Charge to profit or loss
91,000
Liability at 31 March 2021
135,000
The deferred tax liability set out above is expected to reverse within 4 years and relates to accelerated capital allowances that are expected to mature within the same period.
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 29 -
22
Retirement benefit schemes
2021
2020
Unaudited
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
71,076
53,973
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.
23
Share capital
2021
2020
2021
2020
Unaudited
Unaudited
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary 'A' Shares of £1 each
9,950
9,950
9,950
9,950
Ordinary 'B' Shares of £1 each
49
49
49
49
Ordinary 'C' Shares of £1 each
1
1
1
1
10,000
10,000
10,000
10,000
Ordinary A shares have full voting rights attached and are entitled to dividends as well as capital distribution rights.
Ordinary B & C shares are entitled to dividends (if any) but do not possess voting rights.
24
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:
2021
2020
Unaudited
£
£
Within one year
27,532
35,818
Between two and five years
6,078
27,531
33,610
63,349
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 30 -
25
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Purchases of refrigerants in the year totalling £31,880 (2020 - £nil) paid to Chlorogas Limited, a company under common control.
Management charges in the year totalling £110,000 (2020 - £nil) paid to Chlorogas Limited, a company under common control.
26
Directors' transactions
Interest free loans have been granted by the company to its directors as follows:
Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Directors
-
298,564
219,109
(220,700)
296,973
298,564
219,109
(220,700)
296,973
The company has entered into guarantees for its directors as follows:
A personal guarantee of £60,000 has been given by Mr N Fisher, a director, against bank loans held.
27
Subsidiaries
Details of the company's subsidiaries at 31 March 2021 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Airco Centre of Excellence Limited
England and Wales
Ordinary
100.00
Aircon 365 Limited
England and Wales
Ordinary
100.00
Airco (Yorkshire) Limited
England and Wales
Ordinary
100.00
Airco Property Holdings Limited
England and Wales
Ordinary
100.00
Airco Limited
England and Wales
Ordinary
100.00
The registered office
of the subsidiaries
is
Airco House, Goulton Street, Hull, HU3 4DL.
AIRCO REFRIGERATION AND AIRCONDITIONING LIMITED
Airco Refrigeration And Airconditioning Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 31 -
28
Cash generated from operations
2021
2020
Unaudited
£
£
Profit for the year after tax
502,524
396,982
Adjustments for:
Taxation charged
127,871
19,528
Finance costs
64,703
82,705
Investment income
(171)
(5,545)
Gain on disposal of tangible fixed assets
(891)
Amortisation and impairment of intangible assets
10,439
10,437
Depreciation and impairment of tangible fixed assets
352,481
299,428
Movements in working capital:
Increase in stocks
(580,010)
(141,453)
Increase in debtors
(340,649)
(495,952)
Increase in creditors
17,056
942,552
Cash generated from operations
154,244
1,107,791
29
Analysis of changes in net debt
1 April 2020
Cash flows
New finance leases
31 March 2021
£
£
£
£
Cash at bank and in hand
205,295
23,620
-
228,915
Borrowings excluding overdrafts
(825,850)
(192,706)
-
(1,018,556)
Obligations under finance leases
(458,320)
123,261
(735,996)
(1,071,055)
(1,078,875)
(45,825)
(735,996)
(1,860,696)
2021-03-31
2020-04-01
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Mr C A Goodwin
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