Company registration number 05035758 (England and Wales)
SGM WINDOWS MANUFACTURING LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
SGM WINDOWS MANUFACTURING LIMITED
COMPANY INFORMATION
Directors
S G Bull
L T Bull
G M Smith
K B Waters-Smith
Company number
05035758
Registered office
Unit 1, Honywood Square
Honywood Road
Basildon
Essex
SS14 3HT
Auditor
Higgisons
Higgison House
381-383 City Road
London
EC1V 1NW
SGM WINDOWS MANUFACTURING LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Profit and loss account
7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 22
SGM WINDOWS MANUFACTURING LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 1 -

The directors present the strategic report for the year ended 31 October 2023.

Review of the business

Since its incorporation in 2004 the company has been able to build a significant customer base throughout the Southeast, with the principal activity during the year continuing to be a manufacturer and supplier of high-quality windows, doors and conservatories.

Principal risks and uncertainties

In order for the group to remain competitive, it needs to ensure that all trade works are carried out effectively and efficiently as possible. Ensuring staff wellbeing, plant and equipment is well maintained and the latest technologies are employed, is of vital importance to the company.

Development and performance

The company’s turnover decreased year on year by 1.0%, while the gross profit margin increased from 27.0% to 27.6%.

On behalf of the board

S G Bull
Director
29 July 2024
SGM WINDOWS MANUFACTURING LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 2 -

The directors present their annual report and financial statements for the year ended 31 October 2023.

Principal activities

The principal activity of the company continued to be that of manufacture and supply of high-quality windows, doors and conservatories.

Results and dividends

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

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:

S G Bull
L T Bull
G M Smith
K B Waters-Smith
Auditor

Higgisons 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
S G Bull
Director
29 July 2024
SGM WINDOWS MANUFACTURING LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 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.

SGM WINDOWS MANUFACTURING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SGM WINDOWS MANUFACTURING LIMITED
- 4 -
Opinion

We have audited the financial statements of SGM Windows Manufacturing Limited (the 'company') for the year ended 31 October 2023 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:

SGM WINDOWS MANUFACTURING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SGM WINDOWS MANUFACTURING 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.

 

We obtained an understanding of the legal and regulatory frameworks that are applicable to the entity and determined that the most significant are those that relate to trade laws and employment matters.

 

The degree of the risk in relation to irregularities and fraud is minimal.

 

Our audit procedures include walkthrough tests , reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations, auditing the risk of management override of controls, including through testing of journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business. We have also enquired with management in respect of any potential litigation and claims. These procedures are assumed sufficient to identify non-compliance with employment law as well as trade laws.

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.

SGM WINDOWS MANUFACTURING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SGM WINDOWS MANUFACTURING LIMITED
- 6 -

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 an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Ian Shillinglaw
Senior Statutory Auditor
For and on behalf of Higgisons
29 July 2024
Chartered Accountants
Statutory Auditor
Higgison House
381-383 City Road
London
EC1V 1NW
SGM WINDOWS MANUFACTURING LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
14,410,955
14,561,894
Cost of sales
(10,441,322)
(10,631,156)
Gross profit
3,969,633
3,930,738
Administrative expenses
(3,403,791)
(3,415,413)
Other operating income
31,618
37,549
Operating profit
4
597,460
552,874
Interest receivable and similar income
8
3,154
91
Interest payable and similar expenses
9
(13,068)
(11,433)
Profit before taxation
587,546
541,532
Tax on profit
10
(197,762)
(115,766)
Profit for the financial year
389,784
425,766

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

SGM WINDOWS MANUFACTURING LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2023
- 8 -
2023
2022
£
£
Profit for the year
389,784
425,766
Other comprehensive income
-
-
Total comprehensive income for the year
389,784
425,766
SGM WINDOWS MANUFACTURING LIMITED
BALANCE SHEET
AS AT
31 OCTOBER 2023
31 October 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
1,152,245
777,240
Current assets
Stocks
12
874,040
795,683
Debtors
13
4,152,713
4,048,536
Cash at bank and in hand
783,732
745,220
5,810,485
5,589,439
Creditors: amounts falling due within one year
14
(1,753,467)
(1,665,270)
Net current assets
4,057,018
3,924,169
Total assets less current liabilities
5,209,263
4,701,409
Creditors: amounts falling due after more than one year
15
(84,660)
(112,563)
Provisions for liabilities
Deferred tax liability
17
285,101
139,128
(285,101)
(139,128)
Net assets
4,839,502
4,449,718
Capital and reserves
Called up share capital
19
6,000
6,000
Profit and loss reserves
4,833,502
4,443,718
Total equity
4,839,502
4,449,718
The financial statements were approved by the board of directors and authorised for issue on 29 July 2024 and are signed on its behalf by:
S G Bull
Director
Company registration number 05035758 (England and Wales)
SGM WINDOWS MANUFACTURING LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 November 2021
6,000
4,017,952
4,023,952
Year ended 31 October 2022:
Profit and total comprehensive income for the year
-
425,766
425,766
Balance at 31 October 2022
6,000
4,443,718
4,449,718
Year ended 31 October 2023:
Profit and total comprehensive income for the year
-
389,784
389,784
Balance at 31 October 2023
6,000
4,833,502
4,839,502
SGM WINDOWS MANUFACTURING LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
21
627,227
333,748
Interest paid
(13,068)
(11,433)
Income taxes paid
(143,153)
(615)
Net cash inflow from operating activities
471,006
321,700
Investing activities
Purchase of tangible fixed assets
(529,311)
-
0
Proceeds on disposal of tangible fixed assets
30,539
-
0
Interest received
3,154
91
Net cash (used in)/generated from investing activities
(495,618)
91
Financing activities
Payment of finance leases obligations
63,124
(96,339)
Net cash generated from/(used in) financing activities
63,124
(96,339)
Net increase in cash and cash equivalents
38,512
225,452
Cash and cash equivalents at beginning of year
745,220
519,768
Cash and cash equivalents at end of year
783,732
745,220
SGM WINDOWS MANUFACTURING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 12 -
1
Accounting policies
Company information

SGM Windows Manufacturing Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 1, Honywood Square, Honywood Road, Basildon, Essex, SS14 3HT.

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.

 

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.

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:

Plant and equipment
10% on cost
Fixtures and fittings
10% on cost
Motor vehicles
20% 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). 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.

SGM WINDOWS MANUFACTURING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 13 -

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.

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

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.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

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.

SGM WINDOWS MANUFACTURING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 14 -
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, loans from fellow group companies and preference shares that are classified as debt, 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 payments 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. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

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.

SGM WINDOWS MANUFACTURING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 15 -
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.

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.

 

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.

1.12
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.

SGM WINDOWS MANUFACTURING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 16 -

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.

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.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sale of goods
14,410,955
14,561,893
2023
2022
£
£
Other revenue
Interest income
3,154
91
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
9,500
8,580
Depreciation of owned tangible fixed assets
130,129
130,921
Profit on disposal of tangible fixed assets
(6,363)
-
Operating lease charges
117,600
55,734
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
9,500
8,580
SGM WINDOWS MANUFACTURING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 17 -
6
Employees

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

2023
2022
Number
Number
Production
92
96
Management
2
2
Total
94
98

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
3,068,211
2,960,084
Social security costs
241,342
266,597
Pension costs
66,635
271,146
3,376,188
3,497,827
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
62,313
57,990
Company pension contributions to defined contribution schemes
9,861
211,741
72,174
269,731
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
3,154
91
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
3,154
91
SGM WINDOWS MANUFACTURING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 18 -
9
Interest payable and similar expenses
2023
2022
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
13,068
11,433
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
51,789
142,301
Deferred tax
Origination and reversal of timing differences
145,973
(26,535)
Total tax charge
197,762
115,766

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:

2023
2022
£
£
Profit before taxation
587,546
541,532
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
146,887
102,891
Tax effect of expenses that are not deductible in determining taxable profit
12,648
12,261
Permanent capital allowances in excess of depreciation
-
0
26,534
Under/(over) provided in prior years
-
0
615
Deferred tax adjustments in respect of prior years
43,935
(26,535)
Rate of tax adjustment
(5,708)
-
0
Taxation charge for the year
197,762
115,766
SGM WINDOWS MANUFACTURING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 19 -
11
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 November 2022
1,730,861
12,551
10,598
190,573
1,944,583
Additions
325,398
-
0
-
0
203,913
529,311
Disposals
-
0
-
0
-
0
(63,973)
(63,973)
At 31 October 2023
2,056,259
12,551
10,598
330,513
2,409,921
Depreciation and impairment
At 1 November 2022
1,056,140
12,551
10,598
88,055
1,167,344
Depreciation charged in the year
91,063
-
0
-
0
39,066
130,129
Eliminated in respect of disposals
-
0
-
0
-
0
(39,797)
(39,797)
At 31 October 2023
1,147,203
12,551
10,598
87,324
1,257,676
Carrying amount
At 31 October 2023
909,056
-
0
-
0
243,189
1,152,245
At 31 October 2022
674,722
-
0
-
0
102,518
777,240

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

2023
2022
£
£
Plant and equipment
277,984
465,778
Motor vehicles
230,438
84,980
508,422
550,758
12
Stocks
2023
2022
£
£
Work in progress
262,511
261,612
Stocks
611,529
534,071
874,040
795,683
SGM WINDOWS MANUFACTURING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 20 -
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
774,549
896,803
Amounts owed by group undertakings
3,369,457
2,792,549
Other debtors
4,088
353,619
Prepayments and accrued income
4,619
5,565
4,152,713
4,048,536
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
16
190,190
99,163
Trade creditors
1,004,852
824,422
Corporation tax
50,322
141,686
Other taxation and social security
243,813
357,362
Other creditors
62,162
69,146
Accruals and deferred income
202,128
173,491
1,753,467
1,665,270

Obligations under finance leases are secured on the assets acquired.

15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
16
84,660
112,563

Obligations under finance leases are secured on the assets acquired.

16
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
190,190
99,163
In two to five years
84,660
112,563
274,850
211,726
SGM WINDOWS MANUFACTURING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 21 -
17
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
285,101
139,128
2023
Movements in the year:
£
Liability at 1 November 2022
139,128
Charge to profit or loss
145,973
Liability at 31 October 2023
285,101
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
66,635
271,146

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.

19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A Shares of £1 each
4,000
4,000
4,000
4,000
Ordinary B Shares of £1 each
2,000
2,000
2,000
2,000
6,000
6,000
6,000
6,000
SGM WINDOWS MANUFACTURING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 22 -
21
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
389,784
425,766
Adjustments for:
Taxation charged
197,762
115,766
Finance costs
13,068
11,433
Investment income
(3,154)
(91)
Gain on disposal of tangible fixed assets
(6,363)
-
Depreciation and impairment of tangible fixed assets
130,129
149,526
Movements in working capital:
(Increase)/decrease in stocks
(78,357)
46,090
Increase in debtors
(104,177)
(363,221)
Increase/(decrease) in creditors
88,531
(51,518)
Cash generated from operations
627,223
333,751
22
Analysis of changes in net funds
1 November 2022
Cash flows
31 October 2023
£
£
£
Cash at bank and in hand
745,220
38,512
783,732
Obligations under finance leases
(211,726)
(63,124)
(274,850)
533,494
(24,612)
508,882
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