Company Registration No. SC084590 (Scotland)
SCOTIA DOUBLE GLAZING LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
SCOTIA DOUBLE GLAZING LIMITED
CONTENTS
Page
Company information
1
Strategic report
2 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 24
SCOTIA DOUBLE GLAZING LIMITED
COMPANY INFORMATION
- 1 -
Directors
Mr G F Smith
Mr M A Smith
Mr M Woods
Mr A Bone
(Appointed 14 July 2021)
Company number
SC084590
Registered office
Unit 2
Moorfield Park
Kilmarnock
Scotland
KA2 0FJ
Auditor
Consilium Audit Limited
169 West George Street
Glasgow
Scotland
G2 2LB
SCOTIA DOUBLE GLAZING LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2021
- 2 -
The directors present the strategic report for the year ended 30 June 2021.
Review of Business and Key Performamce Indicators
Despite a backdrop that included a global pandemic and a large degree of uncertainty created by Brexit, the Company was still able to generate an operating profit of £1.34m (2020: £0.11m).
As construction sites returned to activity in early July 2020 following the initial outbreak of COVID-19, the Company was able to resume production in reduced numbers whilst observing safe working practices to ensure the welfare of its employees. Consequently, only the first month’s trading suffered a decline in business activity when compared to the previous year, and revenue increased overall by 53.4% from £13.44m to £20.61m. The Company’s gross profit margin rose to 21.3% (2020: 14.1%) and operating margin increased to 6.5% (2020: 0.8%).
The success of the Government’s furlough scheme in protecting jobs, coupled with lockdown measures, combined to create a surge in demand for the Company’s products as the pubic planned home improvements. Also, as working from home started to become commonplace, the housing market experienced unprecedented interest from homeowners, largely amongst those whose behaviour patterns had been altered by new working arrangements.
Activities in the specialist architectural division also began to witness growing demand, largely as high value projects became the focus of attention for many who had access to time and liquidity to invest.
Manufacturing depends on the availability of high-quality raw materials which, towards the end of the reporting period, began to see pressures being sustained by supply chains, partly owing to Brexit but ultimately through the worldwide scarcity of component ingredients, mainly from the Far East. The Company worked hard with suppliers to ensure that interruption of stock deliveries was reduced to a minimum and quality was maintained.
Raw material prices, however, rose to unprecedented levels with suppliers also levying monthly surcharges in many cases, with a proportion of each having to be passed on to housebuilders.
Principal Risks and Uncertainties
The directors have assessed the main risk facing the Company as being the competition from other companies within the industry. The directors believe that the reputation of the Company and the quality of the products will mitigate this risk.
Financial Risk Management
The Company makes little use of financial instruments other than an operational bank account and so its exposure to price risk, credit risk, liquidity risk and cash flow risk is not material for the assessment of the assets, liabilities, financial position and profit or loss of the Company.
SCOTIA DOUBLE GLAZING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 3 -
COVID-19
During the year under review the UK was still being impacted by the COVID-19 pandemic. The wellbeing of our staff, customers, suppliers and other stakeholders remained paramount in any decisions made in respect of the business operation. The Company was able to open up production at the beginning of the financial year, albeit with new procedures in place such as social distancing measures within the workplace environment.
Whilst there were staff absences as a consequence of COVID-19 throughout the year under review, the Company was able to return to full production and start to deliver on its healthy order book.
The Company’s balance sheet remains strong and performance since the year end continues to improve. On that basis the directors believe it is appropriate for the financial statements to be prepared on a going concern basis.
Brexit
The transitional arrangements with the EU ended 31 December 2020 and the Directors have been working with the company's suppliers and customers to help mitigate the impact of the regulatory changes. The Directors are confident that the company is well placed to continue to thrive through these changes and will be able to deal with any issues as they arise.
Mr A Bone
Director
29 June 2022
SCOTIA DOUBLE GLAZING LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2021
- 4 -
The directors present their annual report and financial statements for the year ended 30 June 2021.
Principal activities
The principal activity of the Company in the year under review was that of manufacture and installation of windows and doors to both the new build and trade markets.
Results and dividends
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £94,278. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr G F Smith
Mr R McKnight
(Resigned 21 May 2021)
Mr M A Smith
Mr M Woods
Mr A Bone
(Appointed 14 July 2021)
Auditor
In accordance with the company's articles, a resolution proposing that Consilium Audit Limited be reappointed as auditor of the company will be put at a General Meeting.
Statement of directors' responsibilities
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.
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.
SCOTIA DOUBLE GLAZING LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 5 -
On behalf of the board
Mr A Bone
Director
29 June 2022
SCOTIA DOUBLE GLAZING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SCOTIA DOUBLE GLAZING LIMITED
- 6 -
Opinion
We have audited the financial statements of Scotia Double Glazing Limited (the 'company') for the year ended 30 June 2021 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 30 June 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.
SCOTIA DOUBLE GLAZING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SCOTIA DOUBLE GLAZING LIMITED
- 7 -
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.
SCOTIA DOUBLE GLAZING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SCOTIA DOUBLE GLAZING LIMITED
- 8 -
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's
report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements
.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below
.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
-
We ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations.
-
We identified the laws and regulations applicable to the company through discussions with directors and management and from our knowledge of the regulatory environment relevant to the company.
-
We assessed the extent of compliance with laws and regulations through making enquiries of management and inspecting legal correspondence.
-
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by making enquiries of management as to where they considered there was susceptibility to fraud and their knowledge of actual, suspected and alleged fraud.
-
To address the risk of fraud through management bias and override of controls, we tested journal entries to identify unusual transactions, we assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias and we investigated the rationale behind significant or unusual transactions.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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.
SCOTIA DOUBLE GLAZING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SCOTIA DOUBLE GLAZING LIMITED
- 9 -
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 Holt (Senior Statutory Auditor)
for and on behalf of Consilium Audit Limited
Statutory Auditor
169 West George Street
Glasgow
Scotland
G2 2LB
Date:
30 June 2022
SCOTIA DOUBLE GLAZING LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2021
- 10 -
2021
2020
Notes
£
£
Turnover
20,613,484
13,438,306
Cost of sales
(16,227,737)
(11,541,370)
Gross profit
4,385,747
1,896,936
Distribution costs
(594,153)
(516,408)
Administrative expenses
(2,590,395)
(2,028,141)
Other operating income
142,770
755,932
Operating profit
3
1,343,969
108,319
Interest receivable and similar income
6
396
Interest payable and similar expenses
7
(76,528)
(82,768)
Profit before taxation
1,267,441
25,947
Tax on profit
8
(247,788)
(19,956)
Profit for the financial year
1,019,653
5,991
The profit and loss account has been prepared on the basis that all operations are continuing operations.
SCOTIA DOUBLE GLAZING LIMITED
BALANCE SHEET
AS AT
30 JUNE 2021
30 June 2021
- 11 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
10
1,840,843
1,811,456
Current assets
Stocks
11
1,242,435
535,662
Debtors
12
5,484,582
2,955,976
Cash at bank and in hand
1,502,951
315,483
8,229,968
3,807,121
Creditors: amounts falling due within one year
13
(4,827,209)
(1,194,089)
Net current assets
3,402,759
2,613,032
Total assets less current liabilities
5,243,602
4,424,488
Creditors: amounts falling due after more than one year
14
(1,473,753)
(1,603,036)
Provisions for liabilities
Deferred tax liability
17
173,406
150,384
(173,406)
(150,384)
Net assets
3,596,443
2,671,068
Capital and reserves
Called up share capital
20
6,000
6,000
Profit and loss reserves
3,590,443
2,665,068
Total equity
3,596,443
2,671,068
The financial statements were approved by the board of directors and authorised for issue on 29 June 2022 and are signed on its behalf by:
Mr A Bone
Director
Company Registration No. SC084590
SCOTIA DOUBLE GLAZING LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2021
- 12 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 July 2019
6,000
2,659,077
2,665,077
Year ended 30 June 2020:
Profit and total comprehensive income for the year
-
5,991
5,991
Balance at 30 June 2020
6,000
2,665,068
2,671,068
Year ended 30 June 2021:
Profit and total comprehensive income for the year
-
1,019,653
1,019,653
Dividends
9
-
(94,278)
(94,278)
Balance at 30 June 2021
6,000
3,590,443
3,596,443
SCOTIA DOUBLE GLAZING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
- 13 -
1
Accounting policies
Company information
Scotia Double Glazing Limited is a
private
company
limited by shares
incorporated in
Scotland
.
The registered office is
Unit 2, Moorfield Park, Kilmarnock, Scotland, KA2 0FJ. The company's registration number is SC084590.
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
and presentational
currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares
publicly available consolidated financial statements
, including this company,
which are
intended to give a true and fair view of the assets, liabilities,
financial position and profit or loss
of the group
.
T
he company has
therefore
taken advantage of
e
xemptions from the following disclosure requirements:
-
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
-
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’
:
Interest
income/expense and net gains/losses for each category of financial instrument;
basis
of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income
;
-
Section 33 ‘Related Party Disclosures’
:
Compensation for key management personnel
.
The financial statements of the company are consolidated in the financial statements of
GMSS Holdings (2) Limited
. These consolidated financial statements are available from
the Registrar of Companies, Companies House, Edinburgh Quay 2, 139 Foutainbridge, Edinburgh, EH3 9FF.
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. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
The turnover shown in the Statement of Comprehensive Income represents the value of all goods sold during the year exclusive of Value Added Tax. Sales are recognised at the point at which the Company has fulfilled its contractual obligations and the risks and rewards attaching to the product have been transferred to the customer.
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.
SCOTIA DOUBLE GLAZING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
1
Accounting policies
(Continued)
- 14 -
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 improvements
Over the term of the lease
Plant and equipment
10% straight line
Office equipment
10% to 33% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.5
Stocks
Stocks are valued at the lower of cost and net realisable value. Cost consists of purchase invoice costs. Work in progress is valued based on the costs incurred plus an attributable value of profit to reflect the stage of completion. Cost consists of direct materials, labour and attributable overheads. Net realisable value is based on estimated selling price, less further costs expected to be incurred to completion and disposal.
1.6
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in
profit
or
loss
, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
SCOTIA DOUBLE GLAZING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
1
Accounting policies
(Continued)
- 15 -
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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in
profit
or
loss
in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.8
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
profit and loss account
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
SCOTIA DOUBLE GLAZING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
1
Accounting policies
(Continued)
- 16 -
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.
1.9
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or
fixed assets
.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.10
Retirement benefits
The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. Contributions to the Company's defined contribution scheme are charged to the Statement of Comprehensive Income in the year in which they become payable.
1.11
Leases
Assets held under hire purchase agreements are capitalised and disclosed under tangible fixed assets at their fair value, and
are depreciated in accordance with the above depreciation policies.
Future instalments payable under such agreements, net of finance charges, are included within creditors. Rentals payable
are apportioned between the capital element, which reduces the outstanding obligation included within creditors, and the
finance element, which is charged to the
profit and loss accoun
t on a straight line basis.
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.
SCOTIA DOUBLE GLAZING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
1
Accounting policies
(Continued)
- 17 -
1.12
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
2
Judgements and key sources of estimation uncertainty
Preparation of the financial statements requires management to make significant judgements and estimates. In preparing the financial statements the directors have made the following judgements:
-
Determine whether leases entered into by the Company as a lessee are operating or finance leases. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis.
-
Determine whether there are indicators of impairment of the Company's tangible assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset.
-
Determine whether any bad debt provision is required via review of trade debtors, with debts provided for on a specific basis. Factors considered include customer payment history and agreed credit terms.
-
Determine whether contract revenue and contract costs have been estimated and recognised according to the concepts of prudence and realisation of profits.
-
Determine whether any stock provision is required via a review of the stock holding for obsolete, damaged and slow moving stock.
3
Operating profit
2021
2020
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(142,770)
(755,932)
Fees payable to the company's auditor for the audit of the company's financial statements
17,150
15,450
Depreciation of owned tangible fixed assets
192,301
189,999
Depreciation of tangible fixed assets held under finance leases
80,038
72,009
Operating lease charges
204,172
180,814
SCOTIA DOUBLE GLAZING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 18 -
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Management and administration
54
44
Production, installation and sales
150
135
Total
204
179
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
4,149,597
3,661,229
Social security costs
421,790
297,943
Pension costs
164,318
153,485
4,735,705
4,112,657
5
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
275,040
220,833
Remuneration disclosed above include the following amounts paid to the highest paid director:
2021
2020
£
£
Remuneration for qualifying services
80,000
80,000
6
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
396
SCOTIA DOUBLE GLAZING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 19 -
7
Interest payable and similar expenses
2021
2020
£
£
Bank overdraft interest
32,186
26,651
Loan interest
25,905
34,298
Interest on finance leases and hire purchase contracts
18,437
21,819
76,528
82,768
8
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
224,849
10,208
Adjustments in respect of prior periods
(83)
(9,034)
Total current tax
224,766
1,174
Deferred tax
Origination and reversal of timing differences
23,022
18,782
Total tax charge
247,788
19,956
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
Profit before taxation
1,267,441
25,947
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
240,814
4,930
Tax effect of expenses that are not deductible in determining taxable profit
5,040
14,586
Group relief
(3,876)
(4,185)
Depreciation on assets not qualifying for tax allowances
9,798
9,785
Overprovision in prior period
(83)
(9,034)
Underprovision of deferred tax in prior period
3,874
Enhanced capital allowances
(3,905)
Taxation charge for the year
247,788
19,956
SCOTIA DOUBLE GLAZING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 20 -
9
Dividends
2021
2020
£
£
Final paid
94,278
10
Tangible fixed assets
Leasehold improvements
Plant and equipment
Office equipment
Total
£
£
£
£
Cost
At 1 July 2020
1,149,378
1,567,934
328,035
3,045,347
Additions
84,832
159,841
57,053
301,726
At 30 June 2021
1,234,210
1,727,775
385,088
3,347,073
Depreciation and impairment
At 1 July 2020
216,835
776,815
240,241
1,233,891
Depreciation charged in the year
109,935
109,353
53,051
272,339
At 30 June 2021
326,770
886,168
293,292
1,506,230
Carrying amount
At 30 June 2021
907,440
841,607
91,796
1,840,843
At 30 June 2020
932,543
791,119
87,794
1,811,456
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
£
£
Plant and equipment
650,043
601,901
11
Stocks
2021
2020
£
£
Raw materials and consumables
523,770
304,583
Work in progress
718,665
231,079
1,242,435
535,662
SCOTIA DOUBLE GLAZING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 21 -
12
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
2,899,421
1,284,826
Gross amounts owed by contract customers
1,001,071
368,114
Amounts owed by group undertakings
1,373,814
1,108,359
Other debtors
139,858
47,166
Prepayments and accrued income
70,418
147,511
5,484,582
2,955,976
13
Creditors: amounts falling due within one year
2021
2020
Notes
£
£
Bank loans
15
370,011
232,400
Obligations under finance leases
16
163,848
126,240
Other borrowings
15
31,952
26,061
Trade creditors
2,514,348
187,217
Amounts owed to group undertakings
40,000
Corporation tax
279,511
54,745
Other taxation and social security
95,645
52,418
Government grants
18
25,000
25,000
Accruals and deferred income
1,306,894
490,008
4,827,209
1,194,089
Other loans are secured by way of a bond and floating charge over all of the assets of the Company.
14
Creditors: amounts falling due after more than one year
2021
2020
Notes
£
£
Bank loans and overdrafts
15
1,091,356
1,094,119
Obligations under finance leases
16
177,241
246,813
Other borrowings
15
42,646
74,598
Government grants
18
162,510
187,506
1,473,753
1,603,036
SCOTIA DOUBLE GLAZING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 22 -
15
Loans and overdrafts
2021
2020
£
£
Bank loans
1,461,367
1,326,519
Other loans
74,598
100,659
1,535,965
1,427,178
Payable within one year
401,963
258,461
Payable after one year
1,134,002
1,168,717
Amounts payable after more than one year relating to the Company's loans are repayable in monthly instalments. Interest is payable on the loans at a rate of between 3.5% - 6%.
The Company's bank loan is secured by a floating charge over all of the assets of the Company.
One of the Company's other loans is secured by a floating charge over all of the assets of the Company.
16
Finance lease obligations
2021
2020
Future minimum lease payments due under finance leases:
£
£
Within one year
163,848
126,240
In two to five years
145,923
246,813
In over five years
31,318
341,089
373,053
Hire purchase liabilities are secured over the assets to which they relate.
17
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
173,406
150,384
SCOTIA DOUBLE GLAZING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
17
Deferred taxation
(Continued)
- 23 -
2021
Movements in the year:
£
Liability at 1 July 2020
150,384
Charge to profit or loss
23,022
Liability at 30 June 2021
173,406
18
Deferred grants
2021
2020
£
£
Arising from government grants
187,510
212,506
Deferred income is included in the financial statements as follows:
Current liabilities
25,000
25,000
Non-current liabilities
162,510
187,506
187,510
212,506
19
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
164,318
153,485
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.
20
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
6,000
6,000
6,000
6,000
SCOTIA DOUBLE GLAZING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 24 -
21
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
184,553
199,846
Between two and five years
452,848
635,343
In over five years
253,000
263,417
890,401
1,098,606
22
Capital commitments
Amounts contracted for but not provided in the financial statements:
2021
2020
£
£
Acquisition of tangible fixed assets
247,840
-
23
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
2021
2020
Amounts due to related parties
£
£
Entities with control, joint control or significant influence over the company
40,000
-
Other information
The Company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.
No other transaction were undertaken such as are required to be disclosed under Financial Reporting Standard 102 'The financial Reporting Standard applicable in the UK and Republic of Ireland'.
24
Ultimate controlling party
The Company was under the control of the shareholders in the ultimate parent company GMSS Holdings Limited. No individual shareholder has a controlling interest. On 21 May 2021 GMSS Holdings (2) Limited acquired 82.17% of the issued ordinary share capital of GMSS Holdings Limited and as a consequence became the ultimate parent company from that time.
2021-06-30
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