AVS_FENCING_SUPPLIES_LIMI - Accounts

The directors present the strategic report for the year ended 31 December 2016.

The company’s principal activity comprises the distribution and sale of fencing, decking materials and other landscaping supplies to trade, and retail customers. The company operates solely in the United Kingdom.

The business model is to acquire, centrally support, direct and control branches currently concentrated across the south east of England. Established sales channels include branches, a central support unit and a digital (internet) proposition. The board continues to monitor the contribution from each source in driving growth.

During 2016 the company closed one of its branches (Braintree) where the specific location was judged unlikely to deliver the future level of contribution necessary to justify continued support. However, with few competitors distributing using the same centralised business model as ourselves we have further strengthened our financial position and are ready to acquire single, or multi-site branches as asset or share purchase transactions.

In January 2016 the company re-located its head office to a premises more suited to scaling centralised support to an expanding branch network.

In October 2016 the company changed its ownership to create greater flexibility for executing on its long-term growth strategy and to exit a minority interest. The company is now 100% owned by a newly incorporated parent, AVS Group Holdings Limited.

For 2016 turnover was short versus both plan, and prior year in a challenging macro environment. However, for continuing operations (excluding the impact of the Braintree operation in both years) the company recorded an improvement in sales. Operating profit was markedly improved on prior year.

Results profile:

Turnover reached £ 16.26m (decrease 2.54%)

Gross Profit was £5.32m (decrease 4.44%)

Gross Margin decreased to 32.68% (decrease 0.65%)

Operating profit increased to £0.695m (increase 11.94%)

Shareholders’ funds increased to £1.928m (increase 39.74%)

Organic cash generation remained strong with further improvement in both current and quick-asset ratios. Credit performance again remained in line with expectation.

During 2016 the company continued to leverage the benefit of its successful systems conversion in 2015 (to Intact-IQ), enhancing the efficiency of customer delivery and creating the ability for the board, managers and staff to better monitor and control activities and targets.

In 2016 the company retained Investor In People (IIP) accreditation. IIP celebrate best practice in people management, equipping organisations with the tools they need to succeed. In 2016 London Stock Exchange Group recognised the company as one of the most dynamic SME's within its “1000 companies to inspire Britain” Report, and our fast improving online offering has achieved Feefo Commended Merchant status with an average Service Rating of between 95% and higher.

The Company also retained ISO9001 (Quality) ISO14001 (Environmental) and OHAS 18001 (Health and Safety) accreditation demonstrating its ongoing commitment to continuous business improvement.

The board considers that it has the plan, resources and monitoring capabilities to drive sustained improvement in its sales and operating performance in 2017, and beyond.

UK economic conditions

Deterioration in the general economy of the UK, especially in south east England where most of the company’s branches are situated, might adversely affect all aspects of the company’s business.

Demand for fencing or related products could be influenced by a number of factors including housing supply, inflation rates, uncertainty for the construction industry including supply-chain pricing arising from “Brexit”, employment levels and other factors that determine consumer disposable income.

The board closely monitors these factors, particularly when applying to materials purchasing, vendor selection and inventory management.

Liquidity Risk

Historically, the company has successfully financed growth from its own resources, through loans from directors and through access to a bank overdraft facility. The company closely monitors its funding requirements through budgetary and forecasting control.

In view of the strong capital base and low leverage in the company Statement of Financial Position, the board will in future consider a more diversified funding base whilst retaining the appropriate level of capital for the business to meet both its operational requirements, and strategic development objectives.

Credit Risk

The company offers credit terms for trade accounts retained and therefore faces risk in respect of its sales activities. Adverse changes in the credit quality of trade accounts retained, or arising from UK economic conditions could reduce the recoverability of company assets.

The company operates a number of policies and procedures designed to mitigate credit risk including undertaking credit searches on new accounts, keeping credit limits under review and following set procedures in the event of delinquency, or default. The rate of debtor turnover is monitored.

Operational Risk

Technology

The business model subjects the company to risk regarding its ability to implement and maintain effective systems to process a high volume of transactions with customers including the efficient integration of those arising from incremental business or asset acquisition. A failure to manage technology infrastructure and systems to optimise performance and resilience would adversely affect company performance.

The company retains access to support services from specialist third-party providers who assisted in executing the (Intact-IQ) conversion in 2015. Ongoing training and communications programmes ensure that users and management are able to monitor and mitigate post-implementation issues.

People

The success of the company in realising strategic objectives is dependent on recruiting and retaining skilled personnel at all levels, and at all locations within the organisation.

The company is an equal opportunity employer recruiting staff at all levels in accordance with policies and standards as identified within a Recruitment Selection and Induction Policy. A wide training programme is in place through which staff are encouraged to maximise their potential. The board and senior management regularly and actively communicate with all staff and seek feedback on levels of engagement maintained.

By order of the board

The principal activity of the company continued to be that of the distribution and sale of fencing, decking materials and other landscaping supplies to trade, and retail customers.

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

The results for the year are set out on page 7.

The directors do not recommend payment of an ordinary dividend.

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company'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 financial instruments and the associated risks.

MHA Carpenter Box were appointed auditor to the company 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.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

The directors are responsible for preparing the Strategic Report, 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgements and accounting estimates that are reasonable and prudent; - 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 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.

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

- select suitable accounting policies and then apply them consistently;

- make judgements and accounting estimates that are reasonable and prudent;

- 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 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.

We have audited the financial statements of AVS Fencing Supplies Limited for the year ended 31 December 2016 which comprise the Income Statement, the Statement of Comprehensive Income, the Statement Of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flows and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland".

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.

As explained more fully in the Directors' Responsibilities Statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

A description of the scope of an audit of financial statements is provided on the FRC’s website at www.frc.org.uk/auditscopeukprivate.

In our opinion the financial statements: •    give a true and fair view of the state of the company's affairs as at 31 December 2016 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.

• give a true and fair view of the state of the company's affairs as at 31 December 2016 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.

Emphasis of matter

In forming our opinion on the financial statements, which is not qualified, we have considered the adequacy of the disclosures concerning note 1.2. The condition referred to in note 1.2 indicates the existence of a material uncertainty, the outcome of which is unknown. Our opinion is not modified in respect of this matter emphasised.

In our opinion 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.true

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: •    adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or •    the financial statements are not in agreement with the accounting records and returns; or •    certain disclosures of directors' remuneration specified by law are not made; or •    we have not received all the information and explanations we require for our audit.

• 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.

The income statement has been prepared on the basis that all operations are continuing operations.

AVS Fencing Supplies Limited is a company limited by shares incorporated in England and Wales. The registered office is The Manor House, Graylands Estate, Langhurstwood Road, Horsham, West Sussex, RH12 4QD.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared on the historical cost convention. The principal accounting policies adopted are set out below.

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The directors have considered the additional potential liability disclosed in note 23 of these financial statements as part of their review of cash flows and financing alternatives considered available and have concluded that it is appropriate to continue to adopt the going concern basis of accounting in preparing the financial statements. Consequently, the financial statements do not include the adjustments that would result if the company was unable to continue as a going concern.

Turnover represents amounts receivable for goods and services net of VAT and trade discounts. Revenue is recognised when the company obtains the right to consideration in exchange for the goods and services provided.

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.

Goodwill arising on an acquisition of a trade undertaking is the difference between the fair value of the consideration paid and the fair value of the assets and liabilities acquired. Acquired goodwill is written off in equal annual instalments over its estimated useful economic life of three years. Impairment tests on the carrying value of goodwill are undertaken:- - at the end of the first full financial year following acquisition - in other periods if events or changes in circumstances indicate that the carrying value may not be recoverable.

Acquired goodwill is written off in equal annual instalments over its estimated useful economic life of three years.

Impairment tests on the carrying value of goodwill are undertaken:-

- at the end of the first full financial year following acquisition

- in other periods if events or changes in circumstances indicate that the carrying value may not be recoverable.

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.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:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried in at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Inventories are stated at the lower of cost and estimated selling price less costs to complete and sell. Inventories comprising material costs only are valued on an average cost basis. At each reporting date, provisions are made for obsolete and slow moving stock. are stated at the lower of cost and estimated selling price less costs to complete and sell. Inventories comprising material costs only are valued on an average cost basis. At each reporting date, provisions are made for obsolete and slow moving stock.

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. 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.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments. Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. All financial instruments at AVS Fencing Supplies Limited are basic financial instruments. Financial assets and liabilities are offset , with the net amounts presented in the financial statements , when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. All financial instruments at AVS Fencing Supplies Limited are basic financial instruments.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Debt instruments that are receivable within one year will be measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. Other debt instruments will be measured initially at present value of future payments and subsequently at amortised cost using the effective interest method.  The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.

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. The impairment loss is recognised in profit or loss.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. The impairment loss is recognised in profit or loss.

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

Debt instruments that are payable within one year will be measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid. Other debt instruments will be measured initially at present value of future payments and subsequently at amortised cost using the effective interest method.  The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.

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

Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled or they expire.

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

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

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

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision in measured at present value the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.

Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision in measured at present value the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.

The costs of short-term employee benefits are recognised as a liability and an expense . 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..

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.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

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 statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the income statement so as to produce a constant periodic rate of interest on the remaining balance of the liability.

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 statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the income statement so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term. Rentals payable under operating leases, including any lease incentives received, are charged to income 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 asset are consumed.

Rentals payable under operating leases, including any lease incentives received, are charged to income 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 asset are consumed.

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 are included in the income statement for the period.

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

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

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

The useful lives of the assets and residual values may vary depending upon a number of factors including, but not limited to, technological innovation, actual usage and maintenance levels. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.

The useful life of goodwill may vary depending upon a number of factors including, but not limited to the actual and projected quantum and timing of future returns from the acquisition of a trade undertaking, competition or other market demand, supply or other legislative factors.

If there are indicators that the useful life of a tangible or intangible asset has changed since the most recent annual reporting period previous estimates shall be reviewed and, if current expectations differ the depreciation or amortisation method or useful life shall be amended. Changes shall be accounted for as a change in accounting estimate

The directors have made key assumptions in determining the appropriate impairment provision against inventory items held at the end of the reporting period.

The directors have made key assumptions in determining the appropriate contingent liabilities recorded at the end of the reporting period. The directors have obtained legal advice with regards to the contributions made to the remuneration trust as disclosed in Note 23.

An analysis of the company's revenue is as follows:

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

Their aggregate remuneration comprised:

Investment income includes the following:

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:

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

Bank overdraft facilities are secured by a debenture and legal charge over the company's assets.

Obligations under finance leases are secured by fixed charges on the assets concerned.

The holders of the A ordinary shares are entitled to receive notice of, attend, and vote at any general meeting of the company.

In the previous year the company bought back and cancelled 51 ordinary B shares, 38 ordinary C shares, 89 ordinary D shares, 11 ordinary E shares, and 11 ordinary F shares at par. Consideration of £7,200 was paid for these shares.    

In the previous year the company also bought back and held in treasury 11 ordinary A shares for a consideration of £70,000.

On 25 October 2016 the company cancelled the 11 treasury ordinary A shares.

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

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

The company has made contributions to Remuneration Trusts totalling £2,846,502 over a 5 year period to 31 December 2015, which are currently under enquiry with HM Revenue & Customs.

HM Revenue & Customs have issued Decisions and protective claims for National Insurance totalling £429,771 and Notices of Regulation 80 Determinations proposing additional PAYE totalling £1,116,478 relating to the trust contributions made during the 2010/11, 2011/12, 2012/13, 2013/14, 2014/15 tax years.   

The directors have obtained independent legal advice that the Remuneration Trust contributions made should not be regarded as earnings and have appealed against the above Decisions and Notices of Regulation 80 Determinations issued by HM Revenue & Customs.  On this basis, the directors do not consider it probable that the company will be required to make settlement in respect of the above potential liabilities and a provision has not been recognised in these financial statements for any additional taxes which may become payable as a result of the ongoing enquiries made by HM Revenue & Customs. 

The remuneration of key management personnel, who are also directors, is as follows.

No guarantees have been given or received.

At the balance sheet date the company owed £147,499 (2015: £142,024) to the directors.

During the year the company paid rent of £180,000 (2015: £180,000) to a Small Self Administered Scheme in which certain directors have beneficial interests.

During the year interest of £Nil (2015: £370) has been charged on this facility.

During the year the company made contributions to the AVS Fencing Supplies Limited First and Second Remuneration Trusts of £Nil (2015: £28,893).

The ultimate parent company is AVS Group Holdings Limited, a company registered in England and Wales. The registered office of AVS Group Holdings Limited is The Manor House, Graylands Estate, Langhurstwood Road, Horsham, West Sussex, RH12 4QD.