Company registration number 12189164 (England and Wales)
ARAN GROUP HOLDINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
ARAN GROUP HOLDINGS LIMITED
COMPANY INFORMATION
Directors
Ms C Brooker
Mr K Morris
Mr M D Randall
Mr C A Thomson
Mr J Whitefield
Company number
12189164
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 GROUP HOLDINGS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Group statement of comprehensive income
9
Group balance sheet
10
Company balance sheet
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Notes to the financial statements
15 - 35
ARAN GROUP HOLDINGS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2022
- 1 -
The directors present the strategic report for the year ended 31 March 2022.
Fair review of the business
The directors are pleased with the results for the period during a period of substantial change in the industry.
The principal activities of the trading subsidiaries during the period are as follows:
Aran Energy Holdings Ltd - Provision of management services to the group.
Aran Energy Funding Ltd - Managing Agent for the funding of insulation and heating measures under the Energy Company Obligation (ECO) scheme.
Aran Insulation Ltd - Installation of insulation and heating and renewable energy measures to domestic and commercial customers to reduce customer fuel bills and reduce CO2 emissions.
Group turnover for the period was £11,448,436 (2021: £12,156,740), this has decreased in total due to the disposal of Aran Fire Protection from the Group in the prior year. The continuing operations have however increased in turnover and costs have been managed effectively resulting in a profit before tax of £280,194 (2021: £214,893) was achieved. At the year end, Shareholders funds totalled £1,206,861 (2021: £1,051,534) and Bank balances stood at £1,245,007 (2021: £1,190,136).
Principal risks and uncertainties
The key business risks and uncertainties affecting the group are considered to relate to changes to Government energy policies. This directly affects the ECO funding elements of the business and volumes of energy-saving measures installed. The directors do not consider that Brexit is a key risk to the business and its markets which are UK-based, or that it will have a significant impact on trade, although there is obviously still uncertainty around this and the potential effect on the UK economy in general. Since the year end, the ECO 4 scheme has been launched and the Directors are closely monitoring the opportunities available under this scheme whilst the market acclimatises to the new requirements of the scheme.
Credit risk is significant with large values owed to the Group at any one time. Debtors are therefore monitored on a daily basis and, if necessary, action taken as appropriate.
The nature of the Group’s activities exposes it to a variety of contractual and business risks. These risks are actively managed by monitoring of costs, performed by the management team.
Going Concern: The Directors have taken into consideration the effects that COVID-19 (coronavirus) may have on the company and the Group. However, since the year end, the Group has not been significantly impacted with regards to COVID-19. Following this review the Directors consider it appropriate that the financial statements are prepared on a going concern basis.
Development and performance
The Directors are cautiously optimistic about the current trading year. There has been a substantial volume of new schemes which have taken time to bed in and commence. However the future for the Group over the coming years appears strong due to increased Government support for energy efficiency and commitment to carbon 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.
ARAN GROUP HOLDINGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 2 -
Key performance indicators
The key financial performance indicators are considered to be turnover and gross 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
.
Mr M D Randall
Director
22 December 2022
ARAN GROUP HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2022
- 3 -
The directors present their annual report and financial statements for the year ended 31 March 2022.
Principal activities
The principal activity of the group was that of offering "Whole House" energy efficiency solutions for domestic households under the Energy Company Obligation (ECO) Scheme delivering insulation and heating energy saving measures to reduce customer fuel bills and reduce CO2 emissions of buildings with the United Kingdom.
The group also work with social housing providers, government bodies and construction clients offering insulation and passive fire protection services across the United Kingdom.
The principal activity of Aran Group Holdings Limited is that of a holding company.
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 further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Ms C Brooker
Mr K Morris
Mr M D Randall
Mr C A Thomson
Mr J Whitefield
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
group
is at risk
of
its customers defaulting in making payments for goods that have been supplied to them. To minimise the risk the
group
has a policy of prior payment before fulfilment or giving credit to customers who have demonstrated creditworthiness. To determine previous creditworthiness the
group
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
Ensors Accountants LLP were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Strategic report
The
true
group
has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the
group
's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect
of the review of the business, business risks and future developments.
ARAN GROUP HOLDINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 4 -
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 auditor
of the
company 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 auditor
of the
company
is
aware of that information.
On behalf of the board
Mr M D Randall
Director
22 December 2022
ARAN GROUP HOLDINGS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2022
- 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 group and company 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 group and company, and of the profit or loss of the group and 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;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the
;
-
prepare the
on the going concern basis unless it is inappropriate to presume that the
group and
company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group and the company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
ARAN GROUP HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ARAN GROUP HOLDINGS LIMITED
- 6 -
Opinion
We have audited the
financial statements of
Aran Group Holdings Limited
(the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2022 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements,
including
significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the group's and the parent company's affairs as at 31 March 2022 and of the group's 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
group and the parent
company
in accordance with the ethical requirements that are relevant to our audit of the
financial statements
in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the
group's and
parent
company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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.
ARAN GROUP HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ARAN GROUP HOLDINGS LIMITED
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the
group and the parent
company and
their
environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report or the directors'
r
eport
.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
-
the parent company financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
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
parent
company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have
no realistic alternative but to do so.
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 GROUP HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ARAN GROUP HOLDINGS LIMITED
- 8 -
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:
-
obtained an understanding of the nature of the industry and sector, including the legal and regulatory framework that the
Group
operates in and how the
Group is
complying with the legal and regulatory framework;
-
inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;
-
inquired of management,
those charged with governance
and the entity's solicitors
about
any
non-compliance with laws and regulations
.
-
Reviewed board minutes for any indication of non-compliance with laws and regulations and indications of fraud.
-
Tested
journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions
-
Robustly challenged accounting estimates to ensure no indication of management bias.
However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the
Group
'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.
This report is made solely to the
parent
company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the
parent
company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
parent
company and the
parent
company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Christopher Barrett (Senior Statutory Auditor)
For and on behalf of Ensors Accountants LLP
23 December 2022
Chartered Accountants
Statutory Auditor
Saxon House
Moseley's Farm Business Centre
Fornham All Saints
Bury St Edmunds
IP28 6JY
ARAN GROUP HOLDINGS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2022
- 9 -
Continuing
Discontinued
31 March
Continuing
Discontinued
31 March
operations
operations
2022
operations
operations
2021
Notes
£
£
£
£
£
£
Turnover
3
11,448,436
-
11,448,436
11,202,352
954,388
12,156,740
Cost of sales
(8,472,056)
-
(8,472,056)
(8,607,909)
(614,659)
(9,222,568)
Gross profit
2,976,380
-
2,976,380
2,594,443
339,729
2,934,172
Administrative expenses
(2,948,441)
-
(2,948,441)
(2,536,654)
(301,937)
(2,838,591)
Other operating income
266,545
-
266,545
419,557
6,691
426,248
Operating profit
4
294,484
-
294,484
477,346
44,483
521,829
Interest receivable and similar income
8
151
-
151
241
-
241
Interest payable and similar expenses
9
(14,441)
-
(14,441)
(9,125)
-
(9,125)
Profit/(loss) on disposal of operations
- Subsidiary undertaking
-
-
-
-
(298,052)
(298,052)
Profit before taxation
280,194
-
280,194
468,462
(253,569)
214,893
Tax on profit
10
(124,867)
-
(124,867)
(124,394)
8,452
(115,942)
Profit for the financial year
26
155,327
-
155,327
344,068
(245,117)
98,951
Profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
ARAN GROUP HOLDINGS LIMITED
GROUP BALANCE SHEET
AS AT
31 MARCH 2022
31 March 2022
- 10 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
12
413,727
383,951
Investments
13
66,667
480,394
383,951
Current assets
Stocks
16
120,005
94,263
Debtors
17
3,234,349
3,184,772
Cash at bank and in hand
1,245,007
1,190,136
4,599,361
4,469,171
Creditors: amounts falling due within one year
18
(3,438,569)
(3,495,725)
Net current assets
1,160,792
973,446
Total assets less current liabilities
1,641,186
1,357,397
Creditors: amounts falling due after more than one year
19
(366,763)
(271,863)
Provisions for liabilities
Deferred tax liability
22
67,562
34,000
(67,562)
(34,000)
Net assets
1,206,861
1,051,534
Capital and reserves
Called up share capital
25
59,400
59,400
Share premium account
26
39,600
39,600
Profit and loss reserves
26
1,107,861
952,534
Total equity
1,206,861
1,051,534
The financial statements were approved by the board of directors and authorised for issue on 22 December 2022 and are signed on its behalf by:
22 December 2022
Ms C Brooker
Mr M D Randall
Director
Director
Company registration number 12189164 (England and Wales)
ARAN GROUP HOLDINGS LIMITED
COMPANY BALANCE SHEET
AS AT 31 MARCH 2022
31 March 2022
- 11 -
2022
2021
Notes
£
£
£
£
Fixed assets
Investments
13
2,727,767
2,661,100
Current assets
Cash at bank and in hand
32,375
99,213
Creditors: amounts falling due within one year
18
(2,661,100)
(2,661,100)
Net current liabilities
(2,628,725)
(2,561,887)
Net assets
99,042
99,213
Capital and reserves
Called up share capital
25
59,400
59,400
Share premium account
26
39,600
39,600
Profit and loss reserves
26
42
213
Total equity
99,042
99,213
As permitted by s408 Companies Act 2006, the
c
ompany has not presented its own profit and loss account and related notes. The
c
ompany’s loss for the year was £170 (2021 - £213 profit).
The financial statements were approved by the board of directors and authorised for issue on 22 December 2022 and are signed on its behalf by:
22 December 2022
Ms C Brooker
Mr M D Randall
Director
Director
Company registration number 12189164 (England and Wales)
ARAN GROUP HOLDINGS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022
- 12 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2020
19,800
79,200
853,583
952,583
Year ended 31 March 2021:
Profit and total comprehensive income for the year
-
-
98,951
98,951
Bonus issue of shares
25
39,600
39,600
Other movements
-
(39,600)
-
(39,600)
Balance at 31 March 2021
59,400
39,600
952,534
1,051,534
Year ended 31 March 2022:
Profit and total comprehensive income for the year
-
-
155,327
155,327
Balance at 31 March 2022
59,400
39,600
1,107,861
1,206,861
ARAN GROUP HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022
- 13 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2020
19,800
79,200
99,000
Year ended 31 March 2021:
Profit and total comprehensive income for the year
-
-
213
213
Bonus issue of shares
25
39,600
39,600
Other movements
-
(39,600)
-
(39,600)
Balance at 31 March 2021
59,400
39,600
213
99,213
Year ended 31 March 2022:
Loss and total comprehensive income for the year
-
-
(171)
(171)
Balance at 31 March 2022
59,400
39,600
42
99,042
ARAN GROUP HOLDINGS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2022
- 14 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
31
569,744
632,672
Interest paid
(14,441)
(9,125)
Income taxes paid
(111,345)
(210,191)
Net cash inflow from operating activities
443,958
413,356
Investing activities
Purchase of tangible fixed assets
(97,701)
(121,578)
Proceeds on disposal of tangible fixed assets
66,276
43,819
Purchase of investments
(66,667)
-
Interest received
151
241
Net cash used in investing activities
(97,941)
(77,518)
Financing activities
Proceeds from borrowings
350,000
350,000
Repayment of borrowings
(534,791)
(404,167)
Payment of finance leases obligations
(106,355)
(144,349)
Net cash used in financing activities
(291,146)
(198,516)
Net increase in cash and cash equivalents
54,871
137,322
Cash and cash equivalents at beginning of year
1,190,136
1,052,814
Cash and cash equivalents at end of year
1,245,007
1,190,136
ARAN GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
- 15 -
1
Accounting policies
Company information
Aran Group Holdings Limited
(“the company”)
is a
private
company
limited by shares,
domiciled and incorporated in
England and Wales
.
The registered office
of the company and all of its subsidiaries
is
1-6 The Old Station, Higham, Bury St Edmunds, IP28 6NE.
The group consists of Aran Group Holdings Limited and all of its subsidiaries.
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 a
mounts
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.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
-
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
-
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues
: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
-
Section 26 ‘Share based Payment’
:
Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements
;
-
Section 33 ‘Related Party Disclosures’
:
Compensation for key management personnel
.
1.2
Business combinations
In the parent company
financial statements, t
he cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.
I
nvestments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.
Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.
ARAN GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 16 -
1.3
Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company
Aran Group Holdings Limited
together with
all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates
.
All
financial statements
are made up to 31 March 2022
, except in relation to Aran Fire Protection Limited which left the group on 6 October 2020.
Where necessary, adjustments are made to the
financial statements
of subsidiaries to bring the accounting policies used into line with those used by other members of the
g
roup.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Aran Energy Holdings
Limited a
nd its subsidiaries
ha
ve
been included in the group
financial statements
using the
purchase method of accounting. Accordingly, the group
profit and loss account
and statement of cash flows include the results and cash flows of
Aran Energy Holdings
Limited
and its subsidiaries, except in relation to Aran Fire Protection Limited which left the group on 6 October 2020
. The purchase consideration has been allocated to the assets and liabilities
on the basis of fair value at the date of acquisition.
1.4
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the
group
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.
1.5
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.
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.
1.6
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:
Leasehold land and buildings
20% straight line
Plant and equipment
20% - 33% straight line
Fixtures and fittings
20% - 33% 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 recognised in the
profit and loss account
.
ARAN GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 17 -
1.7
Fixed asset investments
Equity in
vest
ments are measured at fair value through profit or loss
,
except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably
,
which are recognised at cost less impairment until a reliable measure of fair value becomes available.
I
n the parent company
financial statements,
investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the
group. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
1.8
Impairment of fixed assets
At each reporting
period
end date, the
group
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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
1.9
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.
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.
1.10
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 GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 18 -
1.11
Financial instruments
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's
balance sheet
when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
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
m
ethod 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 group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
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 group after deducting all of its liabilities.
ARAN GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 19 -
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
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. 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.
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 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
group's contractual obligations expire or are discharged or cancelled.
1.12
Equity instruments
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
1.13
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
group’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
ARAN GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 20 -
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
if, and only if, there is
a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.14
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.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
Share-based payments
The Group provides share-based payment arrangements to certain employees.
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the
Black-Scholes
model.
Unless it is deemed to be immaterial, t
he fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
Unless it is deemed to be immaterial, t
he expense in relation to options over the
parent
company’s shares granted to employees of a subsidiary is recognised by the
c
ompany as a capital contribution, and presented as an increase in the company’s investment in that subsidiary.
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.
ARAN GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 21 -
1.17
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
d
asset are consumed.
1.18
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.
1.19
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.
ARAN GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 22 -
2
Judgements and key sources of estimation uncertainty
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Amounts recoverable on contracts
The group considers the valuation of jobs completed not invoiced at the year end. Where contracted work spans the year end, provision is made as necessary for the relevant work based on the stage of completion at the year end.
Funding clawback provision
The company makes an estimate for the value of the work which has been completed and invoiced to customers on work which is funded by energy providers, that may be applied to be reclaimed by these providers if the work does not meet expected requirements as specified by the ECO scheme. The assessment is made by management and is based on experience, historical results, and the requirements of the current energy funding scheme which is in place. Where there is any doubt in relation to the work completed as to whether it meets the requirement for funding, a provision is included in the financial statements.
Impairment of debtors
The group makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors such as the current credit rating of the debtor, the aging profile of debtors, available post year end information and historical experience.
3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Principal activity
11,448,436
12,156,740
2022
2021
£
£
Other revenue
Interest income
151
241
Grants received
5,956
247,132
Recharges to related companies
332,596
145,160
ARAN GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 23 -
4
Operating profit
2022
2021
£
£
Operating profit for the year is stated after charging/(crediting):
Government grants
(5,956)
(247,132)
Depreciation of owned tangible fixed assets
71,204
93,637
Depreciation of tangible fixed assets held under finance leases
64,442
37,743
(Profit)/loss on disposal of tangible fixed assets
(6,061)
10,421
Operating lease charges
12,269
59,223
5
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
3,950
3,950
Audit of the financial statements of the company's subsidiaries
34,800
34,800
38,750
38,750
6
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2022
2021
2022
2021
Number
Number
Number
Number
Production staff
26
27
-
-
Administrative staff
36
28
5
-
Total
62
55
5
Their aggregate remuneration comprised:
Group
Company
2022
2021
2022
2021
£
£
£
£
Wages and salaries
2,394,963
2,356,046
Social security costs
269,077
265,249
Pension costs
47,517
40,096
2,711,557
2,661,391
ARAN GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 24 -
7
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
549,998
662,257
Company pension contributions to defined contribution schemes
4,623
4,147
554,621
666,404
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
126,546
150,267
Company pension contributions to defined contribution schemes
660
1,463
There number of directors for whom retirement benefits are accruing under defined contribution pension schemes amounted to 4 (2021: 4).
8
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest on bank deposits
7
241
Other interest income
144
-
Total income
151
241
9
Interest payable and similar expenses
2022
2021
£
£
Interest on bank overdrafts and loans
8
Other interest on financial liabilities
2,831
960
Interest on finance leases and hire purchase contracts
11,610
8,157
Total finance costs
14,441
9,125
10
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
94,805
62,452
Adjustments in respect of prior periods
(3,500)
91,490
Total current tax
91,305
153,942
ARAN GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
10
Taxation
2022
2021
£
£
(Continued)
- 25 -
Deferred tax
Origination and reversal of timing differences
33,562
(38,000)
Total tax charge
124,867
115,942
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:
2022
2021
£
£
Profit before taxation
280,194
214,893
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
53,237
40,830
Tax effect of expenses that are not deductible in determining taxable profit
215
4,898
Unutilised tax losses carried forward
61,891
Permanent capital allowances in excess of depreciation
(4,501)
Deferred tax adjustment
15,376
79
On demerger of subsidiary
56,630
Other adjustments
(1,351)
13,505
Taxation charge
124,867
115,942
The Group had unutilised tax losses of £329,616 (2021: £nil) at the year end.
Factors that may affect future tax changes
The UK corporation tax rate during the financial period was 19%. Deferred taxes as at 31 March 2021 have been calculated using the rates enacted at that date, being 19%.
In the Chancellor's Budget on 3 March 2021, it was announced that from 1 April 2023, there would be an increase in the future main corporation tax rate to 25% and this was substantively enacted on 24 May 2021. As this had not been substantively enacted at the prior financial period end date, it has not impacted upon the deferred tax calculation as at 31 March 2021. The new corporation tax rates proposed have been reflected in the calculation of deferred taxation at 31 March 2022.
ARAN GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 26 -
11
Discontinued operations
Subsidiary undertaking
On 6 October 2020 the group demerged Aran Fire Protection Limited. The loss on disposal has been calculated as follows:
£
Cash Proceeds
-
Net assets disposed of:
Tangible fixed assets
(46,860)
Stocks
(11,799)
Debtors
(618,912)
Cash
(160,244)
Creditors
539,763
(298,052)
Loss on disposal before tax
(298,052)
12
Tangible fixed assets
Group
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 April 2021
96,364
244,055
155,585
673,973
1,169,977
Additions
3,051
24,337
198,249
225,637
Disposals
(70,029)
(70,029)
At 31 March 2022
96,364
247,106
179,922
802,193
1,325,585
Depreciation and impairment
At 1 April 2021
96,364
208,982
112,353
368,327
786,026
Depreciation charged in the year
10,355
13,238
112,053
135,646
Eliminated in respect of disposals
(9,814)
(9,814)
At 31 March 2022
96,364
219,337
125,591
470,566
911,858
Carrying amount
At 31 March 2022
27,769
54,331
331,627
413,727
At 31 March 2021
35,073
43,232
305,646
383,951
The company had no tangible fixed assets at 31 March 2022 or 31 March 2021.
ARAN GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
12
Tangible fixed assets
(Continued)
- 27 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Group
Company
2022
2021
2022
2021
£
£
£
£
Motor vehicles
234,183
222,373
The above motor vehicles
have been
pledged
as security against the obligations under finance leases shown in the Creditors notes.
13
Fixed asset investments
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Investments in subsidiaries
14
2,661,100
2,661,100
Unlisted investments
66,667
66,667
66,667
2,727,767
2,661,100
Movements in fixed asset investments
Group
Investments
£
Cost or valuation
At 1 April 2021
-
Additions
66,667
At 31 March 2022
66,667
Carrying amount
At 31 March 2022
66,667
At 31 March 2021
-
ARAN GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
13
Fixed asset investments
(Continued)
- 28 -
Movements in fixed asset investments
Company
Shares in subsidiaries
Other investments
Total
£
£
£
Cost or valuation
At 1 April 2021
2,661,100
-
2,661,100
Additions
-
66,667
66,667
At 31 March 2022
2,661,100
66,667
2,727,767
Carrying amount
At 31 March 2022
2,661,100
66,667
2,727,767
At 31 March 2021
2,661,100
-
2,661,100
14
Subsidiaries
Details of the company's subsidiaries at 31 March 2022 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
Aran Energy Holdings Limited
1-6 The Old Station, Higham, Bury St Edmunds, IP28 6NE
Ordinary
100.00
-
Aran Services Limited
As above
Ordinary
0
100.00
Aran Insulation Limited
As above
Ordinary
0
100.00
Aran Energy Funding Limited
As above
Ordinary
0
100.00
15
Financial instruments
Group
Company
2022
2021
2022
2021
£
£
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
1,870,916
2,083,483
n/a
n/a
Carrying amount of financial liabilities
Measured at amortised cost
3,350,528
3,351,583
n/a
n/a
As permitted by the reduced disclosure framework within FRS 102, the company has taken advantage of the exemption from disclosing the carrying amount of certain classes of financial instruments
,
denoted by
'
n/a
'
above
.
16
Stocks
Group
Company
2022
2021
2022
2021
£
£
£
£
Finished goods and goods for resale
120,005
94,263
ARAN GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 29 -
17
Debtors
Group
Company
2022
2021
2022
2021
Amounts falling due within one year:
£
£
£
£
Trade debtors
1,857,938
2,058,748
Gross amounts owed by contract customers
1,235,966
938,591
Other debtors
32,467
57,360
Prepayments and accrued income
102,978
125,073
3,229,349
3,179,772
-
-
Amounts falling due after more than one year:
Deferred tax asset (note 22)
5,000
5,000
Total debtors
3,234,349
3,184,772
-
-
18
Creditors: amounts falling due within one year
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Obligations under finance leases
21
82,162
74,875
Other borrowings
20
106,061
371,458
82,500
Trade creditors
1,676,590
1,384,610
Amounts owed to group undertakings
2,661,100
2,578,600
Corporation tax payable
94,805
114,845
Other taxation and social security
359,999
301,160
-
-
Other creditors
783,712
680,869
Accruals and deferred income
335,240
567,908
3,438,569
3,495,725
2,661,100
2,661,100
Included in Other creditors is £562,429 (2021: £490,154) which is secured by way of a fixed and floating charge over the assets of the group, with the exception of Aran Services Limited. There is also a cross guarantee and debenture in place between all group companies, with the exception of Aran Services, in respect of this amount.
Included in Other borrowings, is a balance of £106,061 (2021: £140,000) which is secured by way of a fixed and floating charge over the assets of the group, with the exception of Aran Services. The group companies, with the exception of Aran Services Limited, are jointly liable to repay this loan and two of the companies in the group are guarantors for the loan. There is also a cross guarantee and debenture in place between all group companies, with the exception of Aran Services, in respect of this amount.
ARAN GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 30 -
19
Creditors: amounts falling due after more than one year
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Obligations under finance leases
21
122,824
108,530
Other borrowings
20
243,939
163,333
366,763
271,863
-
-
Included in Other borrowings, is a balance of £
243,939
(202
1
: £
163,333
) which is secured by way of a fixed and floating charge over the assets of the group
, with the exception of Aran Services Limited
. The group companies
, with the exception of Aran Services Limited,
are jointly liable to repay this
loan
and two of the companies in the group are guarantors for the loan. There is also a
c
ross guarantee and debenture in place between all group companies
, with the exception of Aran Services Limited,
in respect of this amount
,
.
20
Loans and overdrafts
Group
Company
2022
2021
2022
2021
£
£
£
£
Other loans
350,000
534,791
82,500
Payable within one year
106,061
371,458
82,500
Payable after one year
243,939
163,333
The
other
loan balance is made up of
1 (2021: 3)
loan
and the principal terms
of the outstanding loan are
as follows:
This loan is secured by way of a fixed and floating charge over the assets of the Group, with the exception of Aran Services Limited.
The interest rate is 5% per annum over the base rate. The final repayment date falls in February 2025. The UK government guarantees 70% of the finance to the lender. The Company had a 3 month capital repayment holiday at the commencement of the loan.
21
Finance lease obligations
Group
Company
2022
2021
2022
2021
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
82,162
77,811
In two to five years
122,824
105,594
204,986
183,405
-
-
ARAN GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
21
Finance lease obligations
(Continued)
- 31 -
Finance lease payments represent rentals payable by the group for certain motor vehicles. 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 four years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
22
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Liabilities
Liabilities
Assets
Assets
2022
2021
2022
2021
Group
£
£
£
£
Accelerated capital allowances
69,860
35,000
5,000
5,000
General provision
(2,298)
(1,000)
-
-
67,562
34,000
5,000
5,000
The company has no deferred tax assets or liabilities.
Group
Company
2022
2022
Movements in the year:
£
£
Liability at 1 April 2021
29,000
-
Charge to profit or loss
33,562
-
Liability at 31 March 2022
62,562
-
The deferred tax
liability
set out above
is expected to reverse within 12 months and relates to
accelerated capital
allowances
and retirement benefits obligations
that are expected to mature within the same period.
23
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
47,517
40,096
A
defined contribution pension scheme
is operated
for all qualifying employees.
The assets of the scheme are held separately from those of the group in an independently administered fund.
The pension commitment of the group, included in Creditors at the balance sheet date, amounted to £9,516 (2021:£9,037).
ARAN GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 32 -
24
Share-based payment transactions
The Group provides share option schemes for staff members.
There are presently two equity settled share option schemes; both of which are HMRC approved, in which employees may be invited to participate. Both of these schemes were introduced in March 2021. The share option schemes vest immediately and are therefore exercisable immediately upon grant. If the options remain unexercised after a period of ten years from the date of grant, or on an employee leaving the Group, the options expire.
In the year ended 31 March 2022, no share options were granted (2021: 12,944). Details of the share options outstanding at the end of the period are as follows:
Group
Number of share options
Weighted average exercise price
2022
2021
2022
2021
Number
Number
£
£
Outstanding at 1 April 2021
12,944
-
-
-
Granted
-
12,944
3.61
3.61
Outstanding at 31 March 2022
12,944
12,944
-
-
Exercisable at 31 March 2022
12,944
12,944
3.61
3.61
The options outstanding at 31 March 2022 had an exercise price ranging from £3.37 to £4.38, and a remaining contractual life of 8.95 years.
Group
The weighted average fair value of options granted in the year was determined using the Black-Scholes
option pricing model. The Black-Scholes model is considered to apply the most appropriate valuation
method due to the relatively short contractual lives of the options and the requirement to exercise within a
short period after the employee becomes entitled to the shares (the “vesting date”).
The expected life used in the model has been adjusted, based on management’s best estimate, for the
effect of non-transferability, exercise restrictions, and behavioural considerations.
Non-vesting conditions and market conditions are taken into account when estimating the fair value of the
option at grant date. Service conditions and non-market performance conditions are taken into account by
adjusting the number of options expected to vest at each reporting date.
On the basis that the value of the share options was deemed to be immaterial, no liability or expense have been accounted for in the financial statements.
25
Share capital
Group and company
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
19,800
19,800
19,800
19,800
A Ordinary shares of £1 each
19,800
19,800
19,800
19,800
B Ordinary shares of £1 each
19,800
19,800
19,800
19,800
59,400
59,400
59,400
59,400
ARAN GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
25
Share capital
(Continued)
- 33 -
The principal rights attached to each class of shares are as follows:
Ordinary Shares - This class of shares carry full rights in respect of distributions of dividends, voting and rank first in the repayment of capital in the event of winding up.
A Ordinary Shares - The distribution rights attached to these shares is calculated only by reference to the available profits arising in connection with Aran Insulation Limited to the exclusion of the holders of B Ordinary shares but not, for the avoidance of doubt, to the exclusion of the Ordinary shares. In the event of winding up, the A Ordinary shares rank behind the Ordinary shares. This class of shares carry no voting rights.
B Ordinary Shares - The distribution rights attached to these shares is calculated only by reference to the available profits arising in connection with Aran Energy Funding Limited to the exclusion of the holders of A Ordinary shares but not, for the avoidance of doubt, to the exclusion of the Ordinary shares. In the event of winding up, the B Ordinary shares rank behind the Ordinary shares. This class of shares carry no voting rights.
26
Reserves
Share premium
The share premium account represents the excess paid over the nominal value of the shares.
Profit and loss reserves
The profit and loss reserves represent cumulative profits or losses, net of dividends and other adjustments.
27
Financial commitments, guarantees and contingent liabilities
A member of the group is one of a number of industry related companies that are currently defending claims against alleged sub-standard installation of cavity wall insulation, leading to damp ingress, the installations being undertaken pre 2018. The group is not aware that any of these alleged instances have been substantiated and is, in conjunction with its insurance partners, defending all such claims vigorously. It is currently impracticable to estimate the financial effect of the ongoing claims as management are not aware of any cases that have gone to trial.
28
Operating lease commitments
Lessee
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Group
Company
2022
2021
2022
2021
£
£
£
£
Within one year
12,112
47,586
-
-
Between two and five years
6,507
160,517
-
-
In over five years
-
29,562
-
-
18,619
237,665
-
-
ARAN GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 34 -
29
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2022
2021
£
£
Aggregate compensation
610,650
761,407
Transactions with related parties
During the year the group entered into the following transactions with related parties:
Sales
Sales
Purchases
Purchases
2022
2021
2022
2021
£
£
£
£
Group
Other related parties
237,610
560,828
595,178
2,022,902
The following unsecured amounts were outstanding at the reporting end date:
Amounts due to related parties
2022
2021
£
£
Group
Other related parties
267,168
215,159
The following unsecured amounts were outstanding at the reporting end date:
Amounts due from related parties
2022
2021
Balance
Balance
£
£
Group
Other related parties
48,774
179,082
30
Directors' transactions
At the year end, an amount of £nil (2021: £67,628) was due to 0 (2021: 2) of the Directors. This amount was repayable within a year and attracted no interest.
Also at the year end, £nil (2021: £82,500) was due to 0 (2021: 1) Director. This amount was repayable monthly with the final repayment falling in March 2022 and attracted interest at 4% per annum.
ARAN GROUP HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 35 -
31
Cash generated from group operations
2022
2021
£
£
Profit for the year after tax
155,327
98,951
Adjustments for:
Taxation charged
124,867
115,942
Finance costs
14,441
9,125
Investment income
(151)
(241)
(Gain)/loss on disposal of tangible fixed assets
(6,061)
59,921
Depreciation and impairment of tangible fixed assets
135,646
131,380
Movements in working capital:
Increase in stocks
(25,742)
(22,827)
(Increase)/decrease in debtors
(49,577)
582,483
Increase/(decrease) in creditors
220,994
(342,062)
Cash generated from operations
569,744
632,672
32
Analysis of changes in net funds - group
1 April 2021
Cash flows
New finance leases
31 March 2022
£
£
£
£
Cash at bank and in hand
1,190,136
54,871
-
1,245,007
Borrowings excluding overdrafts
(534,791)
184,791
-
(350,000)
Obligations under finance leases
(183,405)
106,355
(127,936)
(204,986)
471,940
346,017
(127,936)
690,021
2022-03-31
2021-04-01
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