Company registration number 06066071 (England and Wales)
TIMBER GARDEN BUILDINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
TIMBER GARDEN BUILDINGS LIMITED
COMPANY INFORMATION
Directors
G Vernon
M Anthony
SJ Vernon
Secretary
SJ Vernon
Company number
06066071
Registered office
Chesterton Road
Eastwood Trading Estate
Rotherham
South Yorkshire
England
S65 1SU
Auditor
Hardwick Accountants Limited
Rotherham
South Yorkshire
England
S66 1EH
Business address
Chesterton Road
Eastwood Trading Estate
Rotherham
South Yorkshire
England
S65 1SU
Bankers
HSBC Bank
1 High Street
Doncaster
South Yorkshire
DN1 1EE
Accountants
Brearley & Co Accountants Limited
39/43 Bridge Street
Swinton
Mexborough
South Yorkshire
S64 8AP
TIMBER GARDEN BUILDINGS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 23
TIMBER GARDEN BUILDINGS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2022
- 1 -

The directors present the strategic report for the year ended 31 October 2022.

Review of the business

Turnover for the year has decreased by 39.65% due to a challenging retail market, caused from the post pandemic economic downturn. Cost of sales includes a significant revaluation reduction of stock which has been realised in FY22. Trading margins also suffered a decrease due to the large fluctuations of raw material, resulting from the high demand during the Covid-19 period. The board have taken huge management strides to combat the reduction in revenue, subsequently launching new products and increasing sales exposure through expansion, will ensure the business returns to profitability in FY23. Moving forward the board are focussed in increasing market share for the business, whilst focusing on operational efficiencies. We believe this strategy will make the company more realistic to expected continued economic downturn.

Principal risks and uncertainties

The board believe we have sufficient risk management controls in place to identify what we consider to be principal risks to our business. We recognise the biggest risk at present is Economic Downturn, resulting in reduced consumer spending. This risk has compelled the board to carefully review the products we offer and our sales and marketing strategy. The directors remain confident that strides taken to combat the economic downturn, will ensure business sustains profitability and growth. Fluctuations in critical material supply is considered a risk. The upturn in global demand for timber in 2021 created a rapid increase in the price of this material and other critical materials. The business has needed to track these price fluctuations to be able to sustain a commercial gross profit margin rate and manage the challenges to source adequate supply. The demand has now reduced and subsequently we are now experiencing a significant reduction of material costs, which will allow the business to track selling price and remain competitive within the market. The management structure in place, has risen to this challenge by managing the price and supply levels to excellent effect.

Key performance indicators

Results for the financial year have been negative, with decrease in turnover, gross profit and overall net profit for the year.

 

Turnover has decreased by 39.65% from £12,956,320 to £7,818,002.

 

Gross profit has decreased from that of the previous year, from £2,793,368 to £901,798 with percentage decreasing from 21.56% to 11.53%.

 

The current year has generated a net loss of £1,646,805 compared to a net profit of £971.989 in 2021.

On behalf of the board

M Anthony
Director
19 October 2023
TIMBER GARDEN BUILDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2022
- 2 -

The directors present their annual report and financial statements for the year ended 31 October 2022.

Principal activities

The principal activity of the company continued to be that of manufacture and wholesale of garden buildings.

Results and dividends

The results for the year are set out on page 8.

No ordinary dividends were paid. 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:

G Vernon
M Anthony
SJ Vernon
Auditor

Hardwick Accountants Limited 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.

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.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
M Anthony
Director
19 October 2023
TIMBER GARDEN BUILDINGS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2022
- 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:

 

 

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.

TIMBER GARDEN BUILDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TIMBER GARDEN BUILDINGS LIMITED
- 4 -
Opinion

We have audited the financial statements of Timber Garden Buildings Limited (the 'company') for the year ended 31 October 2022 which comprise the profit and loss account, 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the 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.

Other information

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:

TIMBER GARDEN BUILDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TIMBER GARDEN BUILDINGS 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 identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

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, 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

TIMBER GARDEN BUILDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TIMBER GARDEN BUILDINGS LIMITED
- 6 -

Irregularities are instances of non-compliance with laws and regulations. The objectives of out audit are to obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, to perform audit procedures to help identify instances of non-compliance with other laws and regulations that may have material effect on the financial statements, and to respond appropriately to identified or suspected non-compliance with laws and regulations identified during the audit.

In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud through designing and implementing appropriate responses and to respond appropriately to fraud suspected fraud identified during the audit.

However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the group audit engagement team:

- obtained an understanding of the nature of the industry and sector, including the legal and regulatory framework that the company operates in and how the company are complying with the legal and regulatory framework

- inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud

- discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud.

As a result of these procedures we consider the most significant laws and regulations that have a direct impact on the financial statements are FRS 102, the Companies Act 2006 and HMRC tax compliance regulations. We performed audit procedures to detect non-compliance's which may have a material impact on the financial statements which included reviewing financial statement disclosures, inspecting correspondence and local tax authorities and evaluating advice received from external tax advisors.

The most significant laws and regulations that have an indirect impact on the financial statements are those in relation to health and safety. We performed audit procedures to inquire of management and those charges with governance whether the company is in compliance with these laws and regulations and inspected correspondence with licensing or regulatory authorities.

The audit engagement team identified the risk of management override of controls, revenue recognition as the areas where the financial statements were not most susceptible to material misstatement due to fraud. Audit procedures performed in respect of the risk of management override of controls included but were not limited to testing manual journal entries and other adjustments and evaluating the business rationale in relation to significant, unusual transactions and transactions entered into outside the normal course of business. Audit procedures performed on the risk of fraud in revenue recognition included but were not limited to checking that revenue was recorded in the correct period with reference to sales transactions recorded on either side of the year end.

 

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.

Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors 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.
TIMBER GARDEN BUILDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TIMBER GARDEN BUILDINGS LIMITED
- 7 -
Nicholas Hardwick (Senior Statutory Auditor)
For and on behalf of Hardwick Accountants Limited
19 October 2023
Chartered Accountants
Statutory Auditor
Rotherham
South Yorkshire
England
S66 1EH
TIMBER GARDEN BUILDINGS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 OCTOBER 2022
- 8 -
2022
2021
Notes
£
£
Turnover
3
7,818,002
12,956,320
Cost of sales
(6,916,204)
(10,162,952)
Gross profit
901,798
2,793,368
Administrative expenses
(2,418,360)
(2,296,984)
Other operating income
-
0
594,743
Operating (loss)/profit
4
(1,516,562)
1,091,127
Interest payable and similar expenses
7
(130,243)
(119,138)
(Loss)/profit before taxation
(1,646,805)
971,989
Tax on (loss)/profit
8
310,830
(185,487)
(Loss)/profit for the financial year
(1,335,975)
786,502

The profit and loss account has been prepared on the basis that all operations are continuing operations.

TIMBER GARDEN BUILDINGS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2022
- 9 -
2022
2021
£
£
(Loss)/profit for the year
(1,335,975)
786,502
Other comprehensive income
-
-
Total comprehensive income for the year
(1,335,975)
786,502
TIMBER GARDEN BUILDINGS LIMITED
BALANCE SHEET
AS AT
31 OCTOBER 2022
31 October 2022
- 10 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
9
3,244,271
3,248,759
Current assets
Stocks
10
1,478,436
3,040,578
Debtors
11
978,143
2,169,161
Cash at bank and in hand
101,340
253,989
2,557,919
5,463,728
Creditors: amounts falling due within one year
12
(2,402,615)
(4,362,316)
Net current assets
155,304
1,101,412
Total assets less current liabilities
3,399,575
4,350,171
Creditors: amounts falling due after more than one year
13
(2,028,581)
(1,572,609)
Provisions for liabilities
Deferred tax liability
16
(70,643)
59,950
70,643
(59,950)
Net assets
1,441,637
2,717,612
Capital and reserves
Called up share capital
18
50,000
50,000
Revaluation reserve
1,236,366
1,176,366
Capital redemption reserve
50,000
50,000
Profit and loss reserves
105,271
1,441,246
Total equity
1,441,637
2,717,612

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true

The financial statements were approved by the board of directors and authorised for issue on 19 October 2023 and are signed on its behalf by:
M Anthony
Director
Company registration number 06066071 (England and Wales)
TIMBER GARDEN BUILDINGS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2022
- 11 -
Share capital
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 November 2020
50,000
1,176,366
50,000
654,744
1,931,110
Year ended 31 October 2021:
Profit and total comprehensive income
-
-
-
786,502
786,502
Balance at 31 October 2021
50,000
1,176,366
50,000
1,441,246
2,717,612
Year ended 31 October 2022:
Loss and total comprehensive income
-
-
-
(1,335,975)
(1,335,975)
Other movements
-
60,000
-
-
60,000
Balance at 31 October 2022
50,000
1,236,366
50,000
105,271
1,441,637
TIMBER GARDEN BUILDINGS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 OCTOBER 2022
- 12 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
20
(366,668)
910,497
Interest paid
(130,243)
(119,138)
Income taxes paid
(145,817)
-
0
Net cash (outflow)/inflow from operating activities
(642,728)
791,359
Investing activities
Purchase of tangible fixed assets
-
0
(59,896)
Proceeds from disposal of tangible fixed assets
-
0
3,125
Net cash used in investing activities
-
(56,771)
Financing activities
Repayment of borrowings
(144,000)
(370,000)
Repayment of bank loans
549,037
12,069
Payment of finance leases obligations
(12,817)
34,205
Net cash generated from/(used in) financing activities
392,220
(323,726)
Net (decrease)/increase in cash and cash equivalents
(250,508)
410,862
Cash and cash equivalents at beginning of year
(131,419)
(542,281)
Cash and cash equivalents at end of year
(381,927)
(131,419)
Relating to:
Cash at bank and in hand
101,340
253,989
Bank overdrafts included in creditors payable within one year
(483,267)
(385,408)
TIMBER GARDEN BUILDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
- 13 -
1
Accounting policies
Company information

Timber Garden Buildings Limited is a private company limited by shares incorporated in England and Wales. The registered office is Chesterton Road, Eastwood Trading Estate, Rotherham, South Yorkshire, England, S65 1SU.

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 amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.

1.2
Going concern

Atruet 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. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated 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 costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

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.

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:

Land and buildings Freehold
2% - Cost of property
Plant and machinery
15% - Reducing Balance
Fixtures, fittings & equipment
15% - Reducing Balance
Motor vehicles
25% - Reducing balance
TIMBER GARDEN BUILDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
1
Accounting policies
(Continued)
- 14 -

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). 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 at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.6
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

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, 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.

1.8
Financial instruments
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.

TIMBER GARDEN BUILDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
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 subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through 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.

1.9
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.

TIMBER GARDEN BUILDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
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.

1.10
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 leases asset are consumed.

1.11
Government grants

Government grants are recognised at the fair value of the asset received 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

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.

TIMBER GARDEN BUILDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 17 -
3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Timber garden buildings
7,818,002
12,956,320
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
7,818,002
12,956,320
2022
2021
£
£
Other revenue
Grants received
-
594,743
4
Operating (loss)/profit
2022
2021
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Government grants
-
(594,743)
Fees payable to the company's auditor for the audit of the company's financial statements
8,750
6,000
Depreciation of owned tangible fixed assets
64,488
75,123
(Profit)/loss on disposal of tangible fixed assets
-
5,101
Operating lease charges
302,345
298,128
5
Employees

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

2022
2021
Number
Number
Mangement
3
3
Office
17
15
Production
72
92
Total
92
110
TIMBER GARDEN BUILDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
5
Employees
(Continued)
- 18 -

Their aggregate remuneration comprised:

2022
2021
£
£
Wages and salaries
2,391,949
3,537,969
Pension costs
40,491
58,198
2,432,440
3,596,167
6
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
61,000
61,000
Company pension contributions to defined contribution schemes
1,321
1,756
62,321
62,756
7
Interest payable and similar expenses
2022
2021
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
125,651
110,417
Other finance costs:
Interest on finance leases and hire purchase contracts
1,669
1,221
Other interest
2,923
7,500
130,243
119,138
8
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
-
0
180,237
Adjustments in respect of prior periods
(180,237)
-
0
Total current tax
(180,237)
180,237
Deferred tax
Origination and reversal of timing differences
(130,593)
5,250
Total tax (credit)/charge
(310,830)
185,487
TIMBER GARDEN BUILDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
8
Taxation
(Continued)
- 19 -

The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

2022
2021
£
£
(Loss)/profit before taxation
(1,646,805)
971,989
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
(312,893)
184,678
Tax effect of expenses that are not deductible in determining taxable profit
2,058
1,425
Capital allowances in excess of depreciation
-
0
(5,865)
Depreciation in excess of capital allowances
4,276
-
0
Adjustments to tax charge in respect of previous periods
3
(1)
Deferred Taxation
(4,274)
5,250
Taxation (credit)/charge for the year
(310,830)
185,487
9
Tangible fixed assets
Land and buildings Freehold
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 November 2021
2,700,000
1,297,142
208,388
89,803
4,295,333
Revaluation
60,000
-
0
-
0
-
0
60,000
At 31 October 2022
2,760,000
1,297,142
208,388
89,803
4,355,333
Depreciation and impairment
At 1 November 2021
-
0
841,708
123,637
81,229
1,046,574
Depreciation charged in the year
-
0
52,601
9,743
2,144
64,488
At 31 October 2022
-
0
894,309
133,380
83,373
1,111,062
Carrying amount
At 31 October 2022
2,760,000
402,833
75,008
6,430
3,244,271
At 31 October 2021
2,700,000
455,434
84,751
8,574
3,248,759

Land and buildings with a carrying amount of £2,760,000 were revalued at 21 October 2022 by 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.

 

Included in cost or valuation of land and buildings is freehold land of £898,960 (2021 - £898,960) which is not depreciated.

TIMBER GARDEN BUILDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
9
Tangible fixed assets
(Continued)
- 20 -

The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:

Freehold property
2022
2021
£
£
Cost
1,602,783
1,602,783
Valuation in 2022
1,157,217
1,097,217
Carrying value
2,760,000
2,700,000
10
Stocks
2022
2021
£
£
Raw materials and consumables
1,012,830
2,183,059
Work in progress
60,944
37,986
Finished goods and goods for resale
404,662
819,533
1,478,436
3,040,578
11
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
797,697
2,070,632
Other debtors
132,210
13,500
Prepayments and accrued income
48,236
85,029
978,143
2,169,161
12
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Bank loans and overdrafts
14
635,267
597,200
Obligations under finance leases
15
8,856
12,816
Other borrowings
14
144,000
144,000
Trade creditors
697,631
1,965,701
Corporation tax
2,923
328,977
Other taxation and social security
497,422
865,160
Other creditors
216,240
273,670
Accruals and deferred income
200,276
174,792
2,402,615
4,362,316
TIMBER GARDEN BUILDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 21 -
13
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Bank loans and overdrafts
14
1,629,379
1,020,550
Obligations under finance leases
15
12,532
21,389
Other borrowings
14
386,670
530,670
2,028,581
1,572,609
14
Loans and overdrafts
2022
2021
£
£
Bank loans
1,781,379
1,232,342
Bank overdrafts
483,267
385,408
Other loans
530,670
674,670
2,795,316
2,292,420
Payable within one year
779,267
741,200
Payable after one year
2,016,049
1,551,220

The long-term loans are secured by fixed charges and floating charge held over land and property at Chesteton Road, Eastwood Trading Estate, Rotherham, South Yorkshire S65 1SU.

15
Finance lease obligations
2022
2021
Future minimum lease payments due under finance leases:
£
£
Within one year
8,856
12,816
In two to five years
12,532
21,389
21,388
34,205

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. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

TIMBER GARDEN BUILDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 22 -
16
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
(70,643)
59,950
2022
Movements in the year:
£
Liability at 1 November 2021
59,950
Credit to profit or loss
(130,593)
Asset at 31 October 2022
(70,643)

The deferred tax liability set out above is expected to reverse within [12 months] and relates to accelerated capital allowances that are expected to mature within the same period.

17
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
40,491
58,198

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.

18
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
50,000
50,000
50,000
50,000
19
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

TIMBER GARDEN BUILDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
19
Related party transactions
(Continued)
- 23 -
Sales
Sales
2022
2021
£
£
Sales
550,598
1,261,100
Amount due from related party
192,113
520,961
20
Cash (absorbed by)/generated from operations
2022
2021
£
£
(Loss)/profit for the year after tax
(1,335,975)
786,502
Adjustments for:
Taxation (credited)/charged
(310,830)
185,487
Finance costs
130,243
119,138
(Gain)/loss on disposal of tangible fixed assets
-
5,101
Depreciation and impairment of tangible fixed assets
64,488
75,123
Movements in working capital:
Decrease/(increase) in stocks
1,562,142
(1,067,459)
Decrease/(increase) in debtors
1,191,018
(10,125)
(Decrease)/increase in creditors
(1,667,754)
816,730
Cash (absorbed by)/generated from operations
(366,668)
910,497
21
Analysis of changes in net debt
1 November 2021
Cash flows
31 October 2022
£
£
£
Cash at bank and in hand
253,989
(152,649)
101,340
Bank overdrafts
(385,408)
(97,859)
(483,267)
(131,419)
(250,508)
(381,927)
Borrowings excluding overdrafts
(1,907,012)
(405,037)
(2,312,049)
Obligations under finance leases
(34,205)
12,817
(21,388)
(2,072,636)
(642,728)
(2,715,364)
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