Company registration number 10650952 (England and Wales)
THERMATIC TECHNICAL FM LIMITED
Annual Report And Financial Statements
For The Year Ended 31 December 2023
Thermatic Technical FM Limited
THERMATIC TECHNICAL FM LIMITED
Company Information
Directors
Mr PB Douglas-Fleet
Mr JE Prady
Secretary
Mr E Wratten
Company number
10650952
Registered office
Unit 3 Sovereign Enterprise Park
King William Street
Salford
Manchester
England
M50 3UP
Auditor
Chavereys Audit Limited
The Goods Shed
Jubilee Way
Faversham
Kent
England
ME13 8GD
Thermatic Technical FM Limited
THERMATIC TECHNICAL FM LIMITED
Contents
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 21
Thermatic Technical FM Limited
THERMATIC TECHNICAL FM LIMITED
Strategic Report
For The Year Ended 31 December 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the business
Thermatic Technical FM Limited saw a reduction in turnover during 2023 from £19,718,568 to £18,645,623. This was a result of a strategic decision to exit from loss making contracts and focus on our core customer base.
The reduction in revenue as well bad debt write offs of £222,088 (2022: credit of £6,120) saw operating profit decrease from £1,011,806 to £152,899. The bad debt related to Wilko Limited entering administration.
The company continues to enhance the range of services offered to its customers covering all mechanical and electrical systems in commercial and residential buildings whilst continuing to increase its drainage offering. The company provides a comprehensive national Hard FM solution for its customer base, utilising its strong engineering base to self-deliver the vast majority of services.
The company's excellent customer service is delivered by its highly valued workforce. The average number of employees decreased from 156 in 2022 to 147 in 2023, as non-operating functions such as finance were transferred to the parent company, Thermatic Limited.
Principal risks and uncertainties
The directors consider the full range of risks affecting the company on a regular basis, and where appropriate take action to address such risks. The principal risks and uncertainties facing the company are detailed below:
Market Risk
The company operates in a competitive market place, however the strength of the company brands and a focus on developing long-term relationships with its customers is deemed to cover this risk.
Credit Risk
The company's credit risk is primarily attributed to its trade debtors. The company continues to expand its customer base and has no significant concentration of credit risk. The company has a good record of minimising bad debts and takes the necessary steps to ensure the risk is minimised. The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by credit rating agencies.
Liquidity Risk
The company manages its debt finance in such a way to ensure that it has sufficient funds available for ongoing operations and future developments.
Mr PB Douglas-Fleet
Director
18 September 2024
Thermatic Technical FM Limited
THERMATIC TECHNICAL FM LIMITED
Directors' Report
For The Year Ended 31 December 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of provision of national hard facilities management services across multiple sectors.
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:
Mr PB Douglas-Fleet
Mr JE Prady
Mr CR Tennent
(Resigned 27 June 2024)
Auditor
Chavereys Audit Limited 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 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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
Thermatic Technical FM Limited
THERMATIC TECHNICAL FM LIMITED
Directors' Report (Continued)
For The Year Ended 31 December 2023
- 3 -
On behalf of the board
Mr PB Douglas-Fleet
Director
18 September 2024
Thermatic Technical FM Limited
THERMATIC TECHNICAL FM LIMITED
Independent Auditor's Report
To The Members Of Thermatic Technical FM Limited
- 4 -
Opinion
We have audited the financial statements of Thermatic Technical FM Limited (the 'company') for the year ended 31 December 2023 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 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:
give a true and fair view of the state of the company's affairs as at 31 December 2023 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' report 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.
Thermatic Technical FM Limited
THERMATIC TECHNICAL FM LIMITED
Independent Auditor's Report (Continued)
To The Members Of Thermatic Technical FM 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:
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' 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.
The objectives of our audit are to identify and assess the risks of material misstatement of the financial statements due to fraud or error; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud or error; and to respond appropriately to those risks. Owing the inherent limitations of an audit, there is an unavoidable risk that material misstatements in in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK).
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedure included the following:
We obtained an understanding of the legal and regulatory frameworks applicable to the Company and the sector in which they operate. We determined that the following laws and regulations were most significant: Companies Act 2006 and UK corporate tax laws, employment law, pensions legislation and health and safety law.
Thermatic Technical FM Limited
THERMATIC TECHNICAL FM LIMITED
Independent Auditor's Report (Continued)
To The Members Of Thermatic Technical FM Limited
- 6 -
Identifying and assess the design effectiveness of controls management has in place to prevent and detect fraud;
Understanding how those charged with governance considered and addressed the potential override of controls or other inappropriate influence over the financial reporting process;
Challenging assumptions and judgment made by management in its significant accounting estimates;
Identifying and testing journal entries, in particular any journal entries posted for unusual amounts and outside of normal working hours; and
Assessing the extent of compliance with the relevant laws and regulations.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit
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.
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.
Benjamin Wilkinson BSc FCA
Senior Statutory Auditor
For and on behalf of Chavereys Audit Limited
20 September 2024
The Goods Shed
Jubilee Way
Faversham
Kent
England
ME13 8GD
Thermatic Technical FM Limited
THERMATIC TECHNICAL FM LIMITED
Statement Of Comprehensive Income
For The Year Ended 31 December 2023
- 7 -
2023
2022
Notes
£
£
Turnover
18,645,623
19,718,568
Cost of sales
(13,230,802)
(14,218,664)
Gross profit
5,414,821
5,499,904
Administrative expenses
(5,258,758)
(4,488,098)
Operating profit
3
156,063
1,011,806
Interest payable and similar expenses
6
(3,164)
(4,068)
Profit before taxation
152,899
1,007,738
Tax on profit
7
(46,881)
905
Profit for the financial year
106,018
1,008,643
The profit and loss account has been prepared on the basis that all operations are continuing operations.
Thermatic Technical FM Limited
THERMATIC TECHNICAL FM LIMITED
Balance Sheet
As At 31 December 2023
- 8 -
2023
2022
as restated
Notes
£
£
£
£
Fixed assets
Goodwill
8
112,406
149,873
Other intangible assets
8
28,221
4,345
Total intangible assets
140,627
154,218
Tangible assets
9
214,245
211,193
354,872
365,411
Current assets
Stocks
10
785,142
625,572
Debtors
11
5,271,164
5,490,599
Cash at bank and in hand
1,004,373
805,973
7,060,679
6,922,144
Creditors: amounts falling due within one year
12
(4,523,463)
(4,486,945)
Net current assets
2,537,216
2,435,199
Total assets less current liabilities
2,892,088
2,800,610
Creditors: amounts falling due after more than one year
13
(12,115)
(33,536)
Provisions for liabilities
Deferred tax liability
16
50,462
43,581
(50,462)
(43,581)
Net assets
2,829,511
2,723,493
Capital and reserves
Called up share capital
18
1
1
Profit and loss reserves
2,829,510
2,723,492
Total equity
2,829,511
2,723,493
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 18 September 2024 and are signed on its behalf by:
Mr PB Douglas-Fleet
Director
Company registration number 10650952 (England and Wales)
Thermatic Technical FM Limited
THERMATIC TECHNICAL FM LIMITED
Statement Of Changes In Equity
For The Year Ended 31 December 2023
- 9 -
Share capital
Profit and loss reserves
Total
£
£
£
As restated for the period ended 31 December 2022:
Balance at 1 January 2022
1
1,714,849
1,714,850
Year ended 31 December 2022:
Profit and total comprehensive income
-
1,008,643
1,008,643
Balance at 31 December 2022
1
2,723,492
2,723,493
Year ended 31 December 2023:
Profit and total comprehensive income
-
106,018
106,018
Balance at 31 December 2023
1
2,829,510
2,829,511
Thermatic Technical FM Limited
THERMATIC TECHNICAL FM LIMITED
Notes To The Financial Statements
For The Year Ended 31 December 2023
- 10 -
1
Accounting policies
Company information
Thermatic Technical FM Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 3 Sovereign Enterprise Park, King William Street, Salford, Manchester, England, M50 3UP.
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.
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. The company has therefore taken advantage of exemptions from the following disclosure requirements:
The financial statements of the company are consolidated in the financial statements of Thermatic Limited. These consolidated financial statements are available from its registered office, Unit 3 Sovereign Enterprise Park, King William Street, Salford, Manchester, M50 3UP.
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.
Turnover comprises mechanical and electrical engineering services in commercial buildings Turnover from engineering and servicing services are recognised when all obligations are met. Turnover from installation is recognised in relation to the stage of completion.
Thermatic Technical FM Limited
THERMATIC TECHNICAL FM LIMITED
Notes To The Financial Statements (Continued)
For The Year Ended 31 December 2023
1
Accounting policies
(Continued)
- 11 -
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired in 2017. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation 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:
Software
10% straight line
1.6
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 machinery
25% straight line
Fixtures and fittings
25% straight line
Computers
33% straight line
Motor vehicles
25% reducing balance
Small tools
50% 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.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Thermatic Technical FM Limited
THERMATIC TECHNICAL FM LIMITED
Notes To The Financial Statements (Continued)
For The Year Ended 31 December 2023
1
Accounting policies
(Continued)
- 12 -
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.
1.8
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.
1.9
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.
1.10
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.
Thermatic Technical FM Limited
THERMATIC TECHNICAL FM LIMITED
Notes To The Financial Statements (Continued)
For The Year Ended 31 December 2023
1
Accounting policies
(Continued)
- 13 -
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.
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.
Thermatic Technical FM Limited
THERMATIC TECHNICAL FM LIMITED
Notes To The Financial Statements (Continued)
For The Year Ended 31 December 2023
1
Accounting policies
(Continued)
- 14 -
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.
1.11
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.
1.12
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.
1.13
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.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Thermatic Technical FM Limited
THERMATIC TECHNICAL FM LIMITED
Notes To The Financial Statements (Continued)
For The Year Ended 31 December 2023
1
Accounting policies
(Continued)
- 15 -
1.15
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.
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
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
9
Fees payable to the company's auditor for the audit of the company's financial statements
8,000
7,900
Depreciation of owned tangible fixed assets
94,410
95,356
Depreciation of tangible fixed assets held under finance leases
14,393
19,555
Loss/(profit) on disposal of tangible fixed assets
2,137
(170)
Amortisation of intangible assets
39,153
38,187
Operating lease charges
65,805
68,205
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Directors
1
1
Other staff
146
155
Total
147
156
Thermatic Technical FM Limited
THERMATIC TECHNICAL FM LIMITED
Notes To The Financial Statements (Continued)
For The Year Ended 31 December 2023
4
Employees
(Continued)
- 16 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
7,108,970
7,434,646
Social security costs
762,819
780,252
Pension costs
191,947
186,904
8,063,736
8,401,802
The directors of the company are considered to be the key management personnel.
5
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
122,300
145,415
Company pension contributions to defined contribution schemes
9,900
-
132,200
145,415
6
Interest payable and similar expenses
2023
2022
£
£
Interest on finance leases and hire purchase contracts
3,164
4,068
7
Taxation
2023
2022
£
£
Current tax
Adjustments in respect of prior periods
40,000
Deferred tax
Origination and reversal of timing differences
6,881
(905)
Total tax charge/(credit)
46,881
(905)
Thermatic Technical FM Limited
THERMATIC TECHNICAL FM LIMITED
Notes To The Financial Statements (Continued)
For The Year Ended 31 December 2023
7
Taxation
(Continued)
- 17 -
The actual charge/(credit) 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
152,899
1,007,738
Expected tax charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
35,931
191,470
Tax effect of expenses that are not deductible in determining taxable profit
47
67
Unutilised tax losses carried forward
502
Adjustments in respect of prior years
40,000
Group relief
(43,615)
(203,942)
Permanent capital allowances in excess of depreciation
(1,530)
Amortisation on assets not qualifying for tax allowances
8,805
7,119
Other non-reversing timing differences
(140)
Tax super deduction
(6,078)
Change in tax rate
10,459
Deferred taxation movement
6,881
Taxation charge/(credit) for the year
46,881
(905)
8
Intangible fixed assets
Goodwill
Software
Total
£
£
£
Cost
At 1 January 2023
374,672
7,200
381,872
Additions
25,562
25,562
At 31 December 2023
374,672
32,762
407,434
Amortisation and impairment
At 1 January 2023
224,799
2,855
227,654
Amortisation charged for the year
37,467
1,686
39,153
At 31 December 2023
262,266
4,541
266,807
Carrying amount
At 31 December 2023
112,406
28,221
140,627
At 31 December 2022
149,873
4,345
154,218
Thermatic Technical FM Limited
THERMATIC TECHNICAL FM LIMITED
Notes To The Financial Statements (Continued)
For The Year Ended 31 December 2023
- 18 -
9
Tangible fixed assets
Plant and machinery
Fixtures and fittings
Computers
Motor vehicles
Small tools
Total
£
£
£
£
£
£
Cost
At 1 January 2023
181,157
10,970
75,388
77,650
77,782
422,947
Additions
79,810
167
23,393
11,101
114,471
Disposals
(2,137)
(479)
(2,616)
At 31 December 2023
260,967
11,137
96,644
77,650
88,404
534,802
Depreciation and impairment
At 1 January 2023
100,635
4,897
44,456
20,081
41,685
211,754
Depreciation charged in the year
38,445
2,503
21,718
14,393
31,744
108,803
At 31 December 2023
139,080
7,400
66,174
34,474
73,429
320,557
Carrying amount
At 31 December 2023
121,887
3,737
30,470
43,176
14,975
214,245
At 31 December 2022
80,522
6,073
30,932
57,569
36,097
211,193
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
£
£
Motor vehicles
43,176
57,659
10
Stocks
2023
2022
as restated
£
£
Work in progress
785,142
625,572
Thermatic Technical FM Limited
THERMATIC TECHNICAL FM LIMITED
Notes To The Financial Statements (Continued)
For The Year Ended 31 December 2023
- 19 -
11
Debtors
2023
2022
as restated
Amounts falling due within one year:
£
£
Trade debtors
2,499,124
4,406,354
Amounts owed by group undertakings
2,052,680
826,428
Other debtors
125,762
Prepayments and accrued income
593,598
257,817
5,271,164
5,490,599
12
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
15
21,421
21,421
Invoice discount facility
14
1,174,890
1,205,961
Trade creditors
1,166,951
1,071,292
Amounts owed to group undertakings
14,504
249,228
Taxation and social security
498,279
575,607
Other creditors
196,341
545,488
Accruals and deferred income
1,451,077
817,948
4,523,463
4,486,945
13
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
15
12,115
33,536
14
Loans and overdrafts
2023
2022
£
£
Invoice discount facility
1,174,890
1,205,961
Payable within one year
1,174,890
1,205,961
The loan comprises of a invoice discounting facility. The invoice discount facility is secured on the trade debtors to which it relates.
Thermatic Technical FM Limited
THERMATIC TECHNICAL FM LIMITED
Notes To The Financial Statements (Continued)
For The Year Ended 31 December 2023
- 20 -
15
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
21,421
21,421
In two to five years
12,115
33,536
33,536
54,957
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.
16
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
60,617
53,885
Retirement benefit obligations
(10,155)
(10,304)
50,462
43,581
2023
Movements in the year:
£
Liability at 1 January 2023
43,581
Charge to profit or loss
6,881
Liability at 31 December 2023
50,462
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
191,947
186,904
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.
Thermatic Technical FM Limited
THERMATIC TECHNICAL FM LIMITED
Notes To The Financial Statements (Continued)
For The Year Ended 31 December 2023
- 21 -
18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of 50p each
2
2
1
1
19
Financial commitments, guarantees and contingent liabilities
The company has given a cross guarantee for Thermatic Limited's liabilities with National Westminster Bank plc. As at 31 December 2023 the potential liability stood at £362,500 (2022: £512,500).
20
Related party transactions
During the year, management charges of £100,100 (2022: £99,000) were charged by a company under common control.
During the year, the group received charges of £24,000 (2022: £24,000) from a company connected to the shareholders. At the year end, a balance of £7,200 (2022: £7,200) was due by the company to the related party.
21
Ultimate controlling party
The company is a wholly owned subsidiary of Thermatic Limited. Both companies are registered in England and Wales.
Copies of the consolidated financial statements of Thermatic Limited, in which the results of the company are included, are available from Companies House, Crown Way, Cardiff CF14 3UZ.
Thermatic Limited is controlled by Dr and Mrs R J Wratten.
22
Prior period adjustment
The prior period has been restated, adjusting the presentation of unbilled services from debtors to work in progress. There is no impact on the profit and loss of the company.
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