Company Registration No. SC159622 (Scotland)
THISTLE WINDOWS & CONSERVATORIES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2021
THISTLE WINDOWS & CONSERVATORIES LIMITED
COMPANY INFORMATION
Directors
Edward Nicol Robson
Ian James Bruce
Company number
SC159622
Registered office
Thistle House
Woodside Road
Bridge of Don
Aberdeen
United Kingdom
AB23 8EF
Auditor
Azets Audit Services
37 Albyn Place
Aberdeen
United Kingdom
AB10 1JB
THISTLE WINDOWS & CONSERVATORIES LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 24
THISTLE WINDOWS & CONSERVATORIES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2021
- 1 -
The directors present the strategic report for the year ended 31 August 2021.
Fair review of the business
The directors are satisfied that performance has been in line with expectations and projections.
Results and performance
In the financial period the company's revenues increased by 5.9%. This was a direct result of the COVID-19 pandemic and associated lockdowns. Turnover has recovered during the year as there were less restrictions on the trade imposed by the lockdown measures than in the previous financial year however turnover remains down on pre-March 2020 levels.
Principal risks and uncertainties
The recent economic and political uncertainty is without doubt hindering growth within the home improvements sector. Material price inflation is also considered a risk which is currently difficult to quantify. Despite these risks and an extremely competitive market, the directors are confident that the diverse product range and a customer base who place a high value on quality and service, mitigates much of the risk to future profitability.
Key performance indicators
The directors' consider the following to be the Major Key Performance Indicators:
2021 2020
Revenue £9,266,820 £8,751,145
Gross profit % 18.5% 12.5%
Net Assets £975,657 £1,162,904
The directors are satisfied that in 2020/21 the company performed reasonably against these and other KPIs given the interruption to trade through COVID-19.
COVID-19
At the time of signing this report, the directors believe that the effects of the COVID-19 pandemic are known and do not have severe long term implications on the ability for the company to carry out its trade.
However should further uncertainties arise the directors believe they have adequate reserves and resources to prepare the financial statements on a going concern basis.
Ian James Bruce
Director
1 April 2022
THISTLE WINDOWS & CONSERVATORIES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2021
- 2 -
The directors present their annual report and financial statements for the year ended 31 August 2021.
Principal activities
The principal activity of the company continued to be that of home improvement specialists.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £220,500. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Edward Nicol Robson
Ian James Bruce
Future developments
Despite the uncertainties referred to in the Strategic Report, the directors are confident that the company will continue to grow and trade profitably in the forthcoming years.
Auditor
Azets Audit Services were appointed as 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.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s
auditor
is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s
auditor
is aware of that information.
On behalf of the board
Ian James Bruce
Director
1 April 2022
THISTLE WINDOWS & CONSERVATORIES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 AUGUST 2021
- 3 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
THISTLE WINDOWS & CONSERVATORIES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF THISTLE WINDOWS & CONSERVATORIES LIMITED
- 4 -
Opinion
We have audited the financial statements of Thistle Windows & Conservatories Limited (the 'company') for the year ended 31 August 2021 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 August 2021 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the
financial statements
section of our report. We are independent of the
company
in accordance with the ethical requirements that are relevant to our audit of the
financial statements
in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors'
r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
THISTLE WINDOWS & CONSERVATORIES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THISTLE WINDOWS & CONSERVATORIES LIMITED
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements
that are free from material misstatement, whether due to fraud or error. In preparing the
financial statements
, the
directors are
responsible for assessing the company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors
either
intend
to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's
report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements
.
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.
THISTLE WINDOWS & CONSERVATORIES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF THISTLE WINDOWS & CONSERVATORIES LIMITED
- 6 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
-
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
-
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
-
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
-
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
David Booth (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
1 April 2022
Chartered Accountants
Statutory Auditor
37 Albyn Place
Aberdeen
United Kingdom
AB10 1JB
THISTLE WINDOWS & CONSERVATORIES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2021
- 7 -
2021
2020
Notes
£
£
Turnover
3
9,266,820
8,751,145
Cost of sales
(7,551,222)
(7,658,551)
Gross profit
1,715,598
1,092,594
Administrative expenses
(2,168,142)
(2,111,192)
Other operating income
568,204
959,853
Operating profit/(loss)
4
115,660
(58,745)
Interest receivable and similar income
8
20
Interest payable and similar expenses
7
(66,857)
(89,395)
Profit/(loss) before taxation
48,823
(148,140)
Tax on profit/(loss)
9
(46,678)
8,100
Profit/(loss) for the financial year
2,145
(140,040)
Other comprehensive income
Tax relating to other comprehensive income
31,108
(11,376)
Total comprehensive income for the year
33,253
(151,416)
THISTLE WINDOWS & CONSERVATORIES LIMITED
BALANCE SHEET
AS AT
31 AUGUST 2021
31 August 2021
- 8 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
11
2,828,789
3,025,312
Current assets
Stocks
12
1,929,439
1,972,017
Debtors
13
639,404
537,957
Cash at bank and in hand
57,710
176,803
2,626,553
2,686,777
Creditors: amounts falling due within one year
15
(3,562,290)
(2,597,577)
Net current (liabilities)/assets
(935,737)
89,200
Total assets less current liabilities
1,893,052
3,114,512
Creditors: amounts falling due after more than one year
16
(720,643)
(1,731,949)
Provisions for liabilities
Deferred tax liability
19
196,752
219,659
(196,752)
(219,659)
Net assets
975,657
1,162,904
Capital and reserves
Called up share capital
21
10,000
10,000
Revaluation reserve
590,067
558,959
Profit and loss reserves
375,590
593,945
Total equity
975,657
1,162,904
The financial statements were approved by the board of directors and authorised for issue on 1 April 2022 and are signed on its behalf by:
Ian James Bruce
Director
Company Registration No. SC159622
THISTLE WINDOWS & CONSERVATORIES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2021
- 9 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 September 2019
10,000
570,335
907,985
1,488,320
Year ended 31 August 2020:
Loss for the year
-
-
(140,040)
(140,040)
Other comprehensive income:
Tax relating to other comprehensive income
-
(11,376)
(11,376)
Total comprehensive income for the year
(11,376)
(140,040)
(151,416)
Dividends
10
-
-
(174,000)
(174,000)
Balance at 31 August 2020
10,000
558,959
593,945
1,162,904
Year ended 31 August 2021:
Profit for the year
-
-
2,145
2,145
Other comprehensive income:
Tax relating to other comprehensive income
-
31,108
31,108
Total comprehensive income for the year
31,108
2,145
33,253
Dividends
10
-
-
(220,500)
(220,500)
Balance at 31 August 2021
10,000
590,067
375,590
975,657
THISTLE WINDOWS & CONSERVATORIES LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2021
- 10 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
911,614
783,856
Interest paid
(66,857)
(89,395)
Income taxes paid
(6,317)
Net cash inflow from operating activities
844,757
688,144
Investing activities
Purchase of tangible fixed assets
(163,698)
(292,590)
Proceeds on disposal of tangible fixed assets
92,834
13,587
Interest received
20
Net cash used in investing activities
(70,844)
(279,003)
Financing activities
Repayment of borrowings
(450,000)
Proceeds of new bank loans
697,968
850,000
Repayment of bank loans
(769,236)
(62,383)
Payment of finance leases obligations
(151,238)
(154,258)
Dividends paid
(220,500)
(174,000)
Net cash (used in)/generated from financing activities
(893,006)
459,359
Net (decrease)/increase in cash and cash equivalents
(119,093)
868,500
Cash and cash equivalents at beginning of year
176,803
(691,697)
Cash and cash equivalents at end of year
57,710
176,803
THISTLE WINDOWS & CONSERVATORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2021
- 11 -
1
Accounting policies
Company information
Thistle Windows & Conservatories Limited is a
private
company
limited by shares
incorporated in
Scotland
.
The registered office is
Thistle House, Woodside Road, Bridge of Don, Aberdeen, United Kingdom, AB23 8EF.
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
pound sterling
.
The financial statements have been prepared under the historical cost convention, modified to include properties at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
A
true
t the time of approving the financial statements
, t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future.
It is the opinion of the directors that
the
effect of the
COVID-19 pandemic
are known and do not have severe long term implications on the ability for the company to carry out its trade. Should further uncertainties arise the directors believe they have adequate reserves and resources to prepare the financial statements on a going concern basis.
Th
erefore t
he directors
are of the opinion that it is correct
to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover
represents amounts receivable from the sale and installation of windows, conservatories, kitchens, home improvements and related products. Turnover also includes income from the sale of completed homes at a development site.
Revenue from the s
upply only of windows, conservatories, kitchens, home improvements and related products is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the
supply and installation of windows, conservatories, kitchens, home improvements and related products is recognised by reference to the stage of completion, when the stage of completion, costs incurred and costs to complete can be measured reliably. The stage of completion is calculated by comparing costs incurred mainly in relation to contractual hourly staff rates and materials, as a proportion of total cost. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
THISTLE WINDOWS & CONSERVATORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2021
1
Accounting policies
(Continued)
- 12 -
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
2% on cost
Plant and machinery
25% on reducing balance
Fixtures, fittings & equipment
25% on cost
Motor vehicles
15% on cost
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
1.6
Stocks
Stocks
and work in progress 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.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Basic financial assets
Basic financial assets, which include
debtors
and cash and bank balances, are initially measured at transaction price including transaction costs
.
THISTLE WINDOWS & CONSERVATORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2021
1
Accounting policies
(Continued)
- 13 -
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
THISTLE WINDOWS & CONSERVATORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2021
1
Accounting policies
(Continued)
- 14 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
profit and loss account
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the
profit and loss account
, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or
fixed assets
.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair
value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
THISTLE WINDOWS & CONSERVATORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2021
1
Accounting policies
(Continued)
- 15 -
1.14
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.
1.15
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.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are
as follows.
Work in progress
In recognising profit on work in progress jobs that span the year end, an estimate is required of the expected margin on individual jobs (where the final outcome can be assessed with reasonable certainty). When making the judgement, the directors evaluate this based on past experience and their best knowledge of the status of the job.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2021
2020
£
£
Turnover analysed by class of business
Home improvements
8,036,609
7,298,941
Supply only
1,005,211
705,243
Property development
225,000
746,961
9,266,820
8,751,145
THISTLE WINDOWS & CONSERVATORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2021
3
Turnover and other revenue
(Continued)
- 16 -
2021
2020
£
£
Other significant revenue
Interest income
20
-
Grants received
528,777
926,845
4
Operating profit/(loss)
2021
2020
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Government grants
(528,777)
(926,845)
Fees payable to the company's auditor for the audit of the company's financial statements
13,750
12,000
Depreciation of owned tangible fixed assets
82,193
154,401
Depreciation of tangible fixed assets held under finance leases
176,742
111,172
Loss/(profit) on disposal of tangible fixed assets
8,452
(10,290)
Operating lease charges
6,280
18,963
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Installation
75
93
Sales
8
8
Administration
27
29
Total
110
130
2021
2020
£
£
Wages and salaries
3,491,165
3,675,204
Social security costs
336,600
379,256
Pension costs
107,005
105,881
3,934,770
4,160,341
THISTLE WINDOWS & CONSERVATORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2021
- 17 -
6
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
120,000
115,000
Company pension contributions to defined contribution schemes
18,196
14,258
138,196
129,258
7
Interest payable and similar expenses
2021
2020
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
25,624
38,817
Other interest on financial liabilities
22,529
22,957
48,153
61,774
Other finance costs:
Interest on finance leases and hire purchase contracts
18,704
27,621
66,857
89,395
8
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
20
9
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
38,477
(8,965)
Deferred tax
Origination and reversal of timing differences
4,884
(10,515)
Changes in tax rates
11,380
Adjustment in respect of prior periods
3,317
Total deferred tax
8,201
865
Total tax charge/(credit)
46,678
(8,100)
THISTLE WINDOWS & CONSERVATORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2021
9
Taxation
(Continued)
- 18 -
In the Spring Budget 2020, the UK Government announced that from 1 April 2023 the corporation tax rate would increase to 25% (from 19% as previously enacted). This new law was substantively enacted on 24 May 2021. Deferred taxes at the balance sheet date have been measured using these enacted tax rates and reflected in these financial statements.
The actual charge/(credit) for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
Profit/(loss) before taxation
48,823
(148,140)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
9,276
(28,147)
Tax effect of expenses that are not deductible in determining taxable profit
1,056
4,172
Change in unrecognised deferred tax assets
(94)
Adjustments in respect of prior years
3,317
Permanent capital allowances in excess of depreciation
4,373
4,495
Remeasurement of deferred tax for changes in tax rates
28,750
11,380
Taxation charge/(credit) for the year
46,678
(8,100)
In addition to the amount charged/(credited) to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
2021
2020
£
£
Deferred tax arising on:
Revaluation of property
(31,108)
11,376
10
Dividends
2021
2020
2021
2020
Per share
Per share
Total
Total
£
£
£
£
Ordinary shares
Interim paid
22.05
17.40
220,500
174,000
THISTLE WINDOWS & CONSERVATORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2021
- 19 -
11
Tangible fixed assets
Leasehold land and buildings
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 September 2020
2,173,758
128,164
180,772
1,570,761
4,053,455
Additions
11,354
8,300
4,551
139,493
163,698
Disposals
(222,873)
(222,873)
At 31 August 2021
2,185,112
136,464
185,323
1,487,381
3,994,280
Depreciation and impairment
At 1 September 2020
42,917
105,590
147,200
732,436
1,028,143
Depreciation charged in the year
31,234
6,822
16,968
203,911
258,935
Eliminated in respect of disposals
(121,587)
(121,587)
At 31 August 2021
74,151
112,412
164,168
814,760
1,165,491
Carrying amount
At 31 August 2021
2,110,961
24,052
21,155
672,621
2,828,789
At 31 August 2020
2,130,841
22,574
33,572
838,325
3,025,312
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2021
2020
£
£
Motor vehicles
444,592
273,383
Land and buildings with a carrying amount of £1,900,000 were revalued at 18 October 2020 by Allied Surveyors Scotland Plc, independent valuers not connected with the company on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties.
Land and buildings are carried at valuation.
If land and buildings were measured using the cost model, the carrying amounts
would
have been approximately £1,443,932 (2020 - £1,463,812), being cost £1,566,702 (2020 - £1,555,348) and depreciation £122,770 (2020 - £91,536).
12
Stocks
2021
2020
£
£
Raw materials and consumables
108,204
97,083
Work in progress
1,821,235
1,874,934
1,929,439
1,972,017
THISTLE WINDOWS & CONSERVATORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2021
12
Stocks
(Continued)
- 20 -
Work in progress includes £Nil (2020 - £1,242,299) which is considered to be long term.
13
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
525,205
417,337
Corporation tax recoverable
9,038
Other debtors
30,500
31,394
Prepayments and accrued income
83,699
80,188
639,404
537,957
14
Financial instruments
2021
2020
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
555,705
448,731
Carrying amount of financial liabilities
Measured at amortised cost
3,857,716
3,964,733
15
Creditors: amounts falling due within one year
2021
2020
Notes
£
£
Bank loans
17
940,000
90,000
Obligations under finance leases
18
115,679
176,879
Other borrowings
17
450,000
Trade creditors
853,991
608,839
Corporation tax
29,439
Other taxation and social security
395,778
364,793
Other creditors
13,535
26,133
Accruals and deferred income
1,213,868
880,933
3,562,290
2,597,577
Bank loans and overdrafts are secured by a floating charge over the premises of the company.
Obligations under finance leases are secured over the assets to which they relate.
THISTLE WINDOWS & CONSERVATORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2021
- 21 -
16
Creditors: amounts falling due after more than one year
2021
2020
Notes
£
£
Bank loans and overdrafts
17
556,892
1,478,160
Obligations under finance leases
18
163,751
253,789
720,643
1,731,949
Bank loans and overdrafts are secured by a floating charge over the premises of the company.
Obligations under finance leases are secured over the assets to which they relate.
17
Loans and overdrafts
2021
2020
£
£
Bank loans
1,496,892
1,568,160
Other loans
450,000
1,496,892
2,018,160
Payable within one year
940,000
540,000
Payable after one year
556,892
1,478,160
Within bank loans is an amount of £850,000 which relates to a CBILS loan which was taken during May 2020 is subject to 3.5% interest above base rate after the first anniversary of the drawdown and is repayable by May 2022.
Within bank loans is an amount of £646,892 which was drawn down in December 2020, is subject to 2.7% interest above base rate and is repayable by December 2027. This amount has a floating charge against all assets and property of the company.
Other borrowings represent an external loan which is secured over property held for development. This was repaid in full in August 2021 however at date of signing the security had not yet been released.
18
Finance lease obligations
2021
2020
Future minimum lease payments due under finance leases:
£
£
Within one year
125,765
192,849
In two to five years
169,444
268,213
295,209
461,062
Less: future finance charges
(15,779)
(30,394)
279,430
430,668
THISTLE WINDOWS & CONSERVATORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2021
18
Finance lease obligations
(Continued)
- 22 -
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2021
2020
Balances:
£
£
Accelerated capital allowances
121,611
114,188
Capital gains
76,962
108,070
Short term timing differences
(1,821)
(2,599)
196,752
219,659
2021
Movements in the year:
£
Liability at 1 September 2020
219,659
Charge to profit or loss
8,201
Credit to other comprehensive income
(31,108)
Liability at 31 August 2021
196,752
20
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
107,005
105,881
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.
21
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
10,000
10,000
10,000
10,000
THISTLE WINDOWS & CONSERVATORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2021
- 23 -
22
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2021
2020
£
£
Within one year
52,780
52,000
Between two and five years
211,120
208,000
In over five years
4,580,853
4,632,333
4,844,753
4,892,333
The company has an annual commitment for a ground lease on its business premises. The total commitments include these lease payments until expiry in 2114.
23
Related party transactions
The following amounts were outstanding at the reporting end date:
2021
2020
Amounts due to related parties
£
£
Entities under common control
3,451
-
The following amounts were outstanding at the reporting end date:
2021
2020
Amounts due from related parties
£
£
Entities under common control
47,972
50,201
24
Directors' transactions
Dividends totalling £176,400 (2020 - £139,200) were paid in the year in respect of shares held by the company's directors.
THISTLE WINDOWS & CONSERVATORIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2021
- 24 -
25
Cash generated from operations
2021
2020
£
£
Profit/(loss) for the year after tax
2,145
(140,040)
Adjustments for:
Taxation charged/(credited)
46,678
(8,100)
Finance costs
66,857
89,395
Investment income
(20)
Loss/(gain) on disposal of tangible fixed assets
8,452
(10,290)
Depreciation and impairment of tangible fixed assets
258,935
265,573
Movements in working capital:
Decrease in stocks
42,578
509,973
(Increase)/decrease in debtors
(110,485)
72,003
Increase in creditors
596,474
5,342
Cash generated from operations
911,614
783,856
26
Analysis of changes in net debt
1 September 2020
Cash flows
31 August 2021
£
£
£
Cash at bank and in hand
176,803
(119,093)
57,710
Borrowings excluding overdrafts
(2,018,160)
521,268
(1,496,892)
Obligations under finance leases
(430,668)
151,238
(279,430)
(2,272,025)
553,413
(1,718,612)
2021-08-31
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