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Belgrade Insulations Limited
Registered number: 01249578
Directors' report and
financial statements
For the year ended 28 February 2021
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BELGRADE INSULATIONS LIMITED
COMPANY INFORMATION
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Unit T Gildersome Industrial Estate
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Chartered Accountants & Statutory Auditor
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BELGRADE INSULATIONS LIMITED
CONTENTS
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Independent Auditor's Report
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Statement of Comprehensive Income
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Statement of Financial Position
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Statement of Changes in Equity
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Notes to the Financial Statements
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BELGRADE INSULATIONS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2021
In the early part of 2020/21, the Company experienced a reduction in turnover due to the COVID-19 pandemic. However, the Group made appropriate cost savings to mitigate this downturn and thus continued to trade profitably throughout. Activity levels improved steadily from the second quarter onwards such that a full year Operating Profit in excess of £2.2m was achieved.
The Company has maintained tight controls over its overheads and working capital levels throughout the year and accordingly, in spite of the continuing challenging trading environment, the Company has been able to operate within its Bank facilities throughout the period and expects to be able to continue to do so for the foreseeable future.
The major risks to the business are customer loss through non-competitive pricing or poor service. The Company mitigates these risks by monitoring market prices, ensuring a flexible approach and continuing to meet and exceed customers' expectations and requirements.
The Directors are of the opinion that the Company will not be significantly impacted by the United Kingdom's exit from the European Union as all the suppliers and the overwhelming majority of the customer base are based in the United Kingdom.
The Company has solid reporting systems and produces timely and accurate management information, which is regularly reviewed by the directors.
Financial risks are managed through internal management controls and by careful monitoring of sales and margins. Debtors and cash are closely monitored and vigorously pursued to ensure payments are made in accordance with terms.
Financial key performance indicators
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The directors consider the financial KPI’s of the business to be:
• Turnover;
• Gross margin;
• Operational costs; and
• Cash flow including debt levels.
These are monitored on a monthly basis and resultant actions are taken as and when necessary.
In addition non-financial KPI’s are:
• High standard of customer service;
• Health & safety compliance; and
• Environmental issues.
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BELGRADE INSULATIONS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
The directors, in line with their duties under s172 of the Companies Act 2006, must act in a way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its stakeholders as a whole and in doing so have regard to a range of matters including:
• The likely consequences of any decisions in the long term;
• The interests of the Company’s employees;
• The need to foster the Company’s business relationships with suppliers, customers and others;
• The impact of the Company’s operations on the community and the environment;
• The desirability of the Company maintaining a reputation for high standards of business conduct; and
• The need to act fairly between members of the Company.
The following paragraphs summarise how the Directors fulfil their duty to promote the success of the Company:
Our people and values
The core values influence our entire organisational culture. They affect everything from employee attitudes to the quality of our services. Our core values drive how we operate every business, every day, and in the way we treat employees, customers, suppliers and other stakeholders.
Our employees are fundamental to the delivery of our business goals. Our employees are our key assets and for our business to succeed we actively manage our people’s performance, whilst developing and nurturing talent through mentoring schemes. We also listen to employees’ feedback through a comprehensive appraisal process. We focus on strong talent attraction and retention which is underpinned through our culture and values.
The Company encourages entrepreneurial behaviour in our people and empowers them to make and execute
professional, well-reasoned decisions. Our behaviour is aligned with the expectations of our people, customers,
investors, communities and society as a whole.
Key business relationships
The Company strategy is dedicated to helping it achieve its full potential through strategic transformation.
Our suppliers are key stakeholders in the business and crucial to business performance, so we value the importance of all our suppliers, many of whom have been in partnership with us for over 10 years. We respect the terms of the contracts with our suppliers and ensure that they are paid on time.
Our health and safety commitment
The Company respects diversity and individual human rights and provides a healthy and safe working environment in which all persons receive fair treatment without discrimination. It also opposes enforced labour and child labour and respects fundamental human rights as well as workers' rights.
Our communities and the environment
The Company proactively engages in environmental efforts and works to protect the natural environment, as these are common issues for all of mankind. The Company will also encourage socially responsible behaviour within both its operations and supply chain.
The Company is taking actions to reduce its energy usage, including the renewal of gas-powered forklift trucks for electric alternatives, reducing site to site travel for business meetings, by utilising video conferencing technology and by replacing petrol powered company cars with hybrid or electric alternatives.
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BELGRADE INSULATIONS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
The use of the going concern basis of accounting is appropriate because there are no material uncertainties to events or conditions that may cast significant doubt about the ability of the Company to continue as a going concern.
This report was approved by the board on 24 June 2021 and signed on its behalf.
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R A Khan
Director
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BELGRADE INSULATIONS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2021
The directors present their report and the financial statements for the year ended 28 February 2021.
Directors' responsibilities statement
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The directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;
∙make judgments 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 financial statements;
∙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 to 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.
The profit for the year, after taxation, amounted to £1,714,508 (2020 - £2,278,243).
The directors who served during the year were:
Engagement with suppliers, customers and others
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Consideration of the engagement with suppliers, customers and others are discussed within the S172 statement within the Company strategic report.
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BELGRADE INSULATIONS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
Disclosure of information to auditor
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Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
Post balance sheet events
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There have been no significant Post-Balance Sheet Events.
The auditor, Mazars LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on 24 June 2021 and signed on its behalf.
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BELGRADE INSULATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BELGRADE INSULATIONS LIMITED
Opinion
We have audited the financial statements of Belgrade Insulations Limited (the ‘Company’) for the year ended 28 February 2021 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and notes to the financial statements, including a summary of 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 28 February 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.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's 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 the parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
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BELGRADE INSULATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BELGRADE INSULATIONS LIMITED
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
∙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 Directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
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BELGRADE INSULATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BELGRADE INSULATIONS LIMITED
Responsibilities of Directors
As explained more fully in the Directors' responsibilities statement set out on page 4, 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 either the directors 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 the 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. Based on our understanding of the group and the parent company, and its industry, we identified that the principal risks of non-compliance with laws and regulations related to the employment regulation and health and safety regulation and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements, such as the Companies Act 2006.
We evaluated the Directors' and management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates and significant one-off or unusual transactions.
Our audit procedures were designed to respond to those identified risks, including non-compliance with laws and regulations (irregularities) and fraud that are material to the financial statements. Our audit procedures included but were not limited to:
∙discussing with the Directors and management their policies and procedures regarding compliance with laws and regulations;
∙communicating identified laws and regulations throughout our engagement team and remaining alert to any indications of non-compliance throughout our audit; and
∙considering the risk of acts by the Company which were contrary to applicable laws and regulations, including fraud.
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BELGRADE INSULATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BELGRADE INSULATIONS LIMITED
Our audit procedures in relation to fraud included but were not limited to:
∙making enquiries of the Directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
∙gaining an understanding of the internal controls established to mitigate risks related to fraud;
∙discussing amongst the engagement team the risks of fraud; and
∙addressing the risks of fraud through management override of controls by performing journal entry testing.
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of the audit report
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.
Ian Wrightson (Senior statutory auditor)
for and on behalf of
Mazars LLP
Chartered Accountants and Statutory Auditor
5th Floor
3 Wellington Place
Leeds
LS1 4AP
24 June 2021
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BELGRADE INSULATIONS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 28 FEBRUARY 2021
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Interest Payable And Similar Expenses
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Profit for the financial year
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There were no recognised gains and losses for 2021 or 2020 other than those included in the statement of comprehensive income.
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The notes on pages 13 to 30 form part of these financial statements.
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BELGRADE INSULATIONS LIMITED
REGISTERED NUMBER: 01249578
STATEMENT OF FINANCIAL POSITION
AS AT 28 FEBRUARY 2021
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Creditors: Amounts Falling Due Within One Year
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Total assets less current liabilities
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Creditors: Amounts Falling Due After More Than One Year
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Provisions for liabilities
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Capital Redemption Reserve
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 24 June 2021.
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R A Khan
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The notes on pages 13 to 30 form part of these financial statements.
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BELGRADE INSULATIONS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 28 FEBRUARY 2021
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Capital redemption reserve
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Comprehensive income for the year
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Total comprehensive income for the year
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Dividends: Equity capital
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 29 FEBRUARY 2020
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Capital redemption reserve
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Comprehensive income for the year
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Total comprehensive income for the year
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Dividends: Equity capital
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BELGRADE INSULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2021
Belgrade Insulations Limited ("the Company") is a limited company incorporated in the United Kingdom. The company's principal activity is that of building product suppliers. The address of its registered office is Unit T, Gildersome Industrial Estate, Stone Pits Lane, Leeds, West Yorkshire, LS27 7JZ.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
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Reduced disclosure exemptions
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The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
• the requirements of Section 7 Statement of Cash Flows;
• the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d); and
• the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated statements of KAAM Holdings Limited as at 28 February 2021 and these financial statements may be obtained from Unit T, Gildersome Industrial Estate, Stone Pits Lane, Leeds, West Yorkshire, LS27 7JZ.
The company's business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic Report. The financial position of the company, its cash flows, liquidity position and borrowing facilities are also described in the Strategic Report.
The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the forseeable future. Thus they continue to adopt a going concern basis of accounting in preparing the annual financial statements.
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BELGRADE INSULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2021
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
∙the Company has transferred the significant risks and rewards of ownership to the buyer;
∙the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
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BELGRADE INSULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2021
2.Accounting policies (continued)
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.
Finance costs are charged to the Statement of Comprehensive Income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the company becomes aware of the obligation, and are measured at the best estimate at the Statement of Financial Position date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.
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BELGRADE INSULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2021
2.Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of Financial Position date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the statement of comprehensive income.
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BELGRADE INSULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2021
2.Accounting policies (continued)
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the statement of comprehensive income.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
- 17 -
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BELGRADE INSULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2021
2.Accounting policies (continued)
The Company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and loans with related parties.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the reporting date.
Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is an 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.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
- 18 -
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BELGRADE INSULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2021
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Judgments in applying accounting policies and key sources of estimation uncertainty
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Critical judgements in applying the Company’s accounting policies
The critical judgements that the directors have made in the process of applying the Company’s accounting policies that have the most significant effect on the amounts recognised in the statutory financial statements are discussed below.
(i) Assessing indicators of impairment
In assessing whether there have been any indicators of impairment of assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability and where applicable, the ability of the asset to be operated as planned. There have been no indicators of impairments identified during the current financial year.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
(ii) Estimating value in use
Where an indication of impairment exists, the directors have carried out an impairment review to determine the recoverable amount of the asset, which is the higher of fair value less cost to sell and value in use. The value in use calculation has required the directors to estimate the future cash flows expected to arise from the asset or the cash generating unit and determine a suitable discount rate in order to calculate present value.
(iii) Recoverability of receivables
The Company establishes a provision for receivables that are estimated not to be recoverable. When assessing recoverability the directors have considered factors such as the ageing of the receivables, past experience of recoverability, and the credit profile of individual or groups of customers.
(iv) Tangible fixed assets
Judgement is also applied, when determining the residual values for fixed assets. When determining the residual value, the directors have assessed the amount that the Company would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful life. Where possible this is done with reference to external market prices.
- 19 -
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BELGRADE INSULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2021
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An analysis of turnover by class of business is as follows:
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Insulation and other building products
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Analysis of turnover by country of destination:
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Government grants receivable
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The operating profit is stated after charging:
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Depreciation of tangible fixed assets
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Defined contribution pension costs
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Operating lease rental costs
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- 20 -
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BELGRADE INSULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2021
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Fees payable to the Company's auditor and its associates for the audit of the Company's annual financial statements
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The Company has taken advantage of the exemption not to disclose amounts paid for non audit services as these are disclosed in the group accounts of the parent Company.
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution pension schemes
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The average monthly number of employees, including the directors, during the year was as follows:
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Administrative and operations
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Company contributions to defined contribution pension schemes
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During the year retirement benefits were accruing to 1 director (2020 - 1) in respect of defined contribution pension schemes.
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- 21 -
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BELGRADE INSULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2021
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Interest payable and similar expenses
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Corporation tax - current year
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Corporation tax - prior year
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Origination and reversal of timing differences
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Taxation on profit on ordinary activities
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- 22 -
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BELGRADE INSULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2021
11.Taxation (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is higher than (2020 - higher than) the standard rate of corporation tax in the UK of 19% (2020 - 19%). The differences are explained below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2020 - 19%)
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Capital allowances for year in excess of depreciation
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Adjustments to tax charge in respect of
previous periods - deferred tax
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Adjustment to tax charge in respect of prior periods
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Remeasurement of deferred tax for changes in tax rates
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Other differences leading to a (decrease) increase in the tax charge
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Total tax charge for the year
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Factors that may affect future tax charges
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The UK corporation tax rate was 19% throughout the year.
The UK Government announced in the 2021 budget that from 1 April 2023, the rate of corporation tax in the United Kingdom will increase from 19% to 25%. Companies with profits of £50,000 or less will continue to be taxed at 19%, which is the new small profits rate. Where taxable profits are between £50,000 and £250,000, the higher 25% rate will apply but with a marginal relief applying as profit increases.
- 23 -
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BELGRADE INSULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2021
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Charge for the year on owned assets
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- 24 -
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BELGRADE INSULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2021
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Amounts owed by group companies
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Prepayments and accrued income
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Cash and cash equivalents
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- 25 -
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BELGRADE INSULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2021
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Creditors: Amounts falling due within one year
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Invoice discounting facility
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Other taxation and social security
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The invoice discounting facility is secured on trade debtors.
The bank loan is secured against the assets of the company.
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Creditors: Amounts falling due after more than one year
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- 26 -
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BELGRADE INSULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2021
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Analysis of the maturity of loans is given below:
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Amounts falling due within one year
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Invoice discounting facility
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Amounts falling due 1-2 years
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Amounts falling due 2-5 years
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Amounts falling due after more than 5 years
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- 27 -
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BELGRADE INSULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2021
|
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Cash and cash equivalents
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Financial assets that are debt instruments measured at amortised cost
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Financial liabilities measured at amortised cost
|
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Financial assets measured at amortised cost comprise trade, other debtors and amounts owed by group companies.
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Financial liabilities measured at amortised cost comprise trade creditors, other creditors, bank loans obligations under hire purchase and the invoice discounting facility.
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- 28 -
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BELGRADE INSULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2021
|
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Charged to profit or loss
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The provision for deferred taxation is made up as follows:
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Accelerated capital allowances
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Short term timing differences
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Allotted, called up and fully paid
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20 (2020 - 20) Ordinary shares of £0.10 each
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Capital redemption reserve
This reserve represents amounts transferred following the purchase of own shares.
Profit & loss account
This reserve represents cumulative profits and losses.
- 29 -
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BELGRADE INSULATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2021
The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £220,178 (2020 - £173,139). Contributions totalling £622 (2020 - £nil) were payable to the fund at the balance sheet date and are included in creditors.
|
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Commitments under operating leases
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At 28 February 2021 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Related party transactions
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The Company has taken advantage of the exemption available in section 33 of FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" related party disclosures from the requirement to disclose transactions with group companies on the grounds that consolidated financial statements are prepared by the ultimate parent company. The consolidated financial statements of KAAM Holdings Limited are available from Companies House.
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Post balance sheet events
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There have been no post balance sheet events noted.
The company's ultimate parent company is KAAM Holdings Limited, a company incorporated in England and Wales. There is no single controlling party.
- 30 -
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