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Company Registration number: 08558628

Therma-Mech Ltd

Annual Report and Financial Statements

for the Year Ended 30 June 2024

 

Therma-Mech Ltd

Contents

Company Information

1

Strategic Report

2 to 3

Directors' Report

4

Statement of Directors' Responsibilities

5

Independent Auditor's Report

6 to 9

Profit and Loss Account

10

Statement of Comprehensive Income

11

Balance Sheet

12

Statement of Changes in Equity

13

Notes to the Financial Statements

14 to 29

 

Therma-Mech Ltd

Company Information

Directors

A S Ascott

P J Lewis

R P Smart

A J Sargeant

C P O'Keeffe

A S Woodcock

Company secretary

R Hodges

Registered office

Cargo Work Office Block 1
Cumberland Road
Bristol
BS1 6ZA

Auditors

Albert Goodman LLP 5th Floor
25 King Street
Bristol
BS1 4PB

 

Therma-Mech Ltd

Strategic Report for the Year Ended 30 June 2024

The directors present their strategic report for the year ended 30 June 2024. ('FY24'). Audited comparatives for the year ended 30 June 2023 (‘FY23’) are also included below.

Principal activity

The principal activity of the Company continues to be its operations in the district energy sector, supplying customers with design and build services in relation to district heating and cooling systems.

Financial overview

The company's key financial and other performance indicators during the year were as follows:

Financial KPIs

Unit

2024

2023

Turnover

£

19,854,607

16,578,033

Profit after tax

£

3,100,377

2,704,096

Shareholders' funds

£

2,846,109

6,050,100

Average number of employees

24

17

Business review
The year to 30 June 2024 presented opportunities for the Company from new and existing customers. This resulted in several new district energy projects being secured during the year.

The business performed strongly in the commercial sector, albeit still experienced delays in a number of secured residential schemes.

A main priority for the Directors’ continues to be the wellbeing and safety of our workforce, our customers, the communities we trade within and all other Company stakeholders.

During the year the Company successfully obtained UKAS accredited certifications for its management systems: Quality (ISO:9001); Environmental (ISO:14001); and Health & Safety (ISO:45001).

Considering the underlying economic uncertainty in the last 12 months, the Directors are satisfied with its performance this financial year and with how it has navigated through the trading environment.
 

Future developments

The Directors do not anticipate any significant developments for the Company during the coming year. It is expected that the Company will continue to operate as a going concern for the foreseeable future.

The Directors remain confident that the Company is well places to take advantage of opportunities as they arise and to continue its profitable growth path.

 

Therma-Mech Ltd

Strategic Report for the Year Ended 30 June 2024

Principal risks and uncertainties

The Company's operations expose it to a variety of risks in the ordinary course of the business including credit risk and liquidity risk.

The Company reduces its exposure to credit risk by implementing strict credit control procedures and imposition of credit limits on acceptance of new customers. A high proportion of the Company's customers comprise blue chip multinational corporations and government departments with strong credit ratings.

The Company funds its day to day operations from operating cash flow. Intergroup loans are also available if needed from time to time. Liquidity risk is managed through the preparation of detailed cash flow forecasts and the application of strict cash management policies to ensure that the Company maintains sufficient funds for operations.

Approved by the Board on 27 March 2025 and signed on its behalf by:


R P Smart
Director

   
 

Therma-Mech Ltd

Directors' Report for the Year Ended 30 June 2024

The directors present their report and the financial statements for the year ended 30 June 2024.

Directors of the company

The directors who held office during the year were as follows:

A S Ascott

P J Lewis

R P Smart

A J Sargeant (appointed 14 March 2024)

C P O'Keeffe (appointed 14 March 2024)

A S Woodcock (appointed 14 March 2024)

Going concern

These financial statements have been prepared on a going concern basis. The directors, have considered the financial position of the Company for a period of at least twelve months from the date of signing these financial statements, have no resaon to believe that a material uncertainty exists that may cast doubt about the ability of the Company to continue as a going concern. Accordingly the directors have a reasonable expectation that the company will continue in operational existence and thus they continue to adopt the going concern basis of accounting in preparing the financial statements.

Matters covered in the Strategic Report
The mandatory disclosures in relation to the principal risks and uncertainties and the future development of the Company are considered by the Directors to be of strategic importance. These have therefore been included in the Strategic Report.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the Company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

Approved by the Board on 27 March 2025 and signed on its behalf by:


R P Smart
Director

   
 

Therma-Mech Ltd

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities 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 apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

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.

 

Therma-Mech Ltd

Independent Auditor's Report to the Members of Therma-Mech Ltd

Opinion

We have audited the financial statements of Therma-Mech Ltd (the 'company') for the year ended 30 June 2024, which comprise the Profit and Loss Account, Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, and Notes to the Financial Statements, including a summary of 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 30 June 2024 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.

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 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 director's 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 original financial statements were 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.

 

Therma-Mech Ltd

Independent Auditor's Report to the Members of Therma-Mech Ltd

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

In the light of our 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 and the Directors' Report.

Matters on which we are required to report by exception

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

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

the financial statements are not in agreement with the accounting records and returns; or

certain disclosures of directors' 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 Statement of Directors' Responsibilities set out on page 5, 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.

 

Therma-Mech Ltd

Independent Auditor's Report to the Members of Therma-Mech Ltd

Auditor Responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

The extent to which the audit was considered capable of detecting irregularities including fraud

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

we identified the laws and regulations applicable to the Company through discussions with directors and other management, and from our commercial knowledge and experience of the sector;

we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Company, including the Companies Act 2006, taxation legislation and health and safety legislation;

we assessed the extent of compliance with the laws and regulations identified above; and

identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

performed analytical procedures to identify any unusual or unexpected relationships;

tested journal entries to identify unusual transactions;

assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and

investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

 

Therma-Mech Ltd

Independent Auditor's Report to the Members of Therma-Mech Ltd

agreeing financial statement disclosures to underlying supporting documentation;

reading the minutes of meetings of those charged with governance; and

enquiring of management as to actual and potential litigation and claims.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at 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 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.





Christopher Walford Bsc ACA (Senior Statutory Auditor)
For and on behalf of Albert Goodman LLP, Statutory Auditor

5th Floor
25 King Street
Bristol
BS1 4PB

27 March 2025

 

Therma-Mech Ltd

Profit and Loss Account
for the Year Ended 30 June 2024

Note

2024
 £

2023
 £

Turnover

3

19,854,607

16,578,033

Cost of sales

 

(13,567,298)

(11,626,026)

Gross profit

 

6,287,309

4,952,007

Administrative expenses

 

(2,223,059)

(1,592,591)

Operating profit

4

4,064,250

3,359,416

Other interest receivable and similar income

5

40,021

27,318

Interest payable and similar charges

6

(27,306)

(21,016)

Profit before tax

 

4,076,965

3,365,718

Taxation

10

(976,588)

(661,622)

Profit for the financial year

 

3,100,377

2,704,096

The above results were derived from continuing operations.

 

Therma-Mech Ltd

Statement of Comprehensive Income
for the Year Ended 30 June 2024

2024
£

2023
£

Profit for the year

3,100,377

2,704,096

Total comprehensive income for the year

3,100,377

2,704,096

 

Therma-Mech Ltd

(Registration number: 08558628)
Balance Sheet as at 30 June 2024

Note

2024
£

2023
£

Fixed assets

 

Tangible assets

11

771,730

369,869

Current assets

 

Stocks

12

83,175

-

Debtors

13

5,289,956

3,634,666

Cash at bank and in hand

 

1,673,786

5,133,215

 

7,046,917

8,767,881

Creditors: Amounts falling due within one year

15

(4,608,856)

(2,712,673)

Net current assets

 

2,438,061

6,055,208

Total assets less current liabilities

 

3,209,791

6,425,077

Creditors: Amounts falling due after more than one year

15

(241,782)

(339,877)

Provisions for liabilities

16

(121,900)

(35,100)

Net assets

 

2,846,109

6,050,100

Capital and reserves

 

Called up share capital

2

2

Retained earnings

2,846,107

6,050,098

Shareholders' funds

 

2,846,109

6,050,100

Approved and authorised by the Board on 27 March 2025 and signed on its behalf by:
 


R P Smart
Director

   
 

Therma-Mech Ltd

Statement of Changes in Equity
for the Year Ended 30 June 2024

Share capital
£

Retained earnings
£

Total
£

At 1 July 2023

2

6,050,098

6,050,100

Profit for the year

-

3,100,377

3,100,377

Dividends

-

(6,304,368)

(6,304,368)

At 30 June 2024

2

2,846,107

2,846,109

Share capital
£

Retained earnings
£

Total
£

At 1 July 2022

2

4,599,433

4,599,435

Profit for the year

-

2,704,096

2,704,096

Dividends

-

(1,253,431)

(1,253,431)

At 30 June 2023

2

6,050,098

6,050,100

 

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2024

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
Cargo Work Office Block 1
Cumberland Road
Bristol
BS1 6ZA

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

These financial statements are presented in Sterling (£).

Summary of disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Starndard applicable in the UK and Republic of Ireland":

The requirements of Section 7 Statement of Cash Flows;
The requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
The requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
The requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
The requirements of Section 33 Related Party Disclosures paragraph 33.7.

Turnover recognition

Turnover is recognised to the extent that is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is shown in the profit and loss account represents the value of all materials and services provided to clients during the year, at selling price exclusive of VAT.

For materials and equipment procured on behalf of clients, revenue is recognised at the point of delivery to site / client premises.

 

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2024

Contract revenue recognition

Revenue from district energy and build services is recognised as the service is provided.
A monthly application for works performed is approved by the client and a monthly invoice is raised.
Full provision is made for changes to final project margins on a monthly basis and reviewed in detail at year end.
Revenue is recognised on a gross basis in terms of retention held by clients. Historical recovery of retentions has been excellent.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Deferred tax is recognised on timing differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the company. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Deferred tax liabilities are presented within provisions for liabilities on the balance sheet.

Tangible assets

Tangible assets are stated at cost, less accumulated depreciation and accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Plant and machinery

5 years straight line

Motor Vehicles

5 years straight line

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

 

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2024

Debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Historically trade debtors impairment has been negligible, and no provisions are required.

Creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade Creditors are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Assets held under hire purchase agreements are capitalised as tangible fixed assets with the future obligation being recognised as a liability. Finance costs are recognised in the Profit and Loss Account calculated at a constant periodic rate of interest over the term of the liability.

Reserves

Called up share capital represents the nominal value of shares that have been issued.

Profit and loss account includes all current and prior period profits and losses.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

 

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2024

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease. Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Defined contribution pension obligation

The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payments obligations.

The contributions are recognised as an expense in the profit and loss account when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the company in independently administered funds.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
 

 

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2024

Financial Instruments
The Company has elected to apply the provisions of Section 11 "Basic Financial Instruments " of FRS102 to all if of its financial instruments.

Financial instruments are recognised in the Company's Statement of Financial Position 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.

Financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transactions costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of future receipts discounted at a market rate of interest.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date.

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual agreements entered into. An equity instruments contract that evidences a residual interest in the assets of the Company after the deduction of its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest-method. Discounting is omitted where the effect of discounting is immaterial.

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfer the asset and substantially all the risks and rewards of the ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

 

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2024

Financial Instruments
The Company has elected to apply the provisions of Section 11 "Basic Financial Instruments " of FRS102 to all if of its financial instruments.

Financial instruments are recognised in the Company's Statement of Financial Position 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.

Financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transactions costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of future receipts discounted at a market rate of interest.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date.

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual agreements entered into. An equity instruments contract that evidences a residual interest in the assets of the Company after the deduction of its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest-method. Discounting is omitted where the effect of discounting is immaterial.

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfer the asset and substantially all the risks and rewards of the ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

Judgements in applying accounting policies and key sources of estimation uncertainty

In applying the Company's accounting policies, the directors are required to make judgements, estimates and assumptions in determining the carrying amounts of assets and liabilities. The directors' judgements, estimates and assumptions are based on the best and most reliable evidence available at the time when the decisions are made, and are based on historical experience and other factors that are considered to be applicable. Due to the inherent subjectivity involved in making such judgements, estimates and assumptions, the actual results and outcomes may differ.

The critical judgements that the directors have made in the process of applying the Company's accounting policies that have the most significant effect on the amounts recognised in the financial statements are discussed below.

(i) Assessing indicators of impairment
In assessing whether there have been any indicators of impairment of the assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability. There have been no indicators of impairments identified during the current financial year.

 

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2024

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty, that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(ii) Recoverability of debtors
The directors establish a provision for debtors that are estimated not to be recoverable. When assessing recoverability the directors consider factors such as the aging of debtors, past experience of recoverability, and the credit profile of individual or groups of customers.

(iii) Revenue recognition
Revenue from district energy and build services is recognised as the service is provided.
A monthly application for works performed is approved by the client and a monthly invoice is raised.
Full provision is made for changes to final project margins on a monthly basis and reviewed in detail at year end.
Revenue is recognised on a gross basis in terms of retention held by clients. Historical recovery of retentions has been excellent.

3

Turnover

The analysis of the company's Turnover for the year from continuing operations is as follows:

2024
£

2023
£

District heating installation

19,854,607

16,578,033

4

Operating profit

Arrived at after charging/(crediting)

2024
£

2023
£

Depreciation expense

134,453

55,032

Operating lease expense - property

104,454

18,000

Operating lease expense - plant and machinery

(4,328)

56,792

Loss on disposal of property, plant and equipment

1,185

12,918

5

Other interest receivable and similar income

2024
£

2023
£

Interest income on bank deposits

40,021

27,318

 

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2024

6

Interest payable and similar expenses

2024
£

2023
£

Interest on bank borrowings

17,140

19,479

Interest on obligations under finance leases and hire purchase contracts

10,166

1,537

27,306

21,016

7

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2024
£

2023
£

Wages and salaries

1,968,612

1,120,135

Social security costs

191,560

124,839

Pension costs, defined contribution scheme

29,627

11,138

2,189,799

1,256,112

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

2024
No.

2023
No.

Operations

11

10

Finance and admin

13

7

24

17

8

Directors' remuneration

The directors' remuneration for the year was as follows:

2024
£

2023
£

Remuneration

631,277

318,250

During the year the number of directors who were receiving benefits and share incentives was as follows:

2024
No.

2023
No.

Accruing benefits under money purchase pension scheme

6

-

 

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2024

In respect of the highest paid director:

2024
£

2023
£

Remuneration

127,160

125,562

Company contributions to money purchase pension schemes

2,326

5,562

9

Auditors' remuneration

2024
£

2023
£

Audit of the financial statements

14,050

13,375


 

10

Taxation

Tax charged/(credited) in the profit and loss account

2024
£

2023
£

Current taxation

UK corporation tax

925,362

662,113

UK corporation tax adjustment to prior periods

(35,574)

(1,955)

889,788

660,158

Deferred taxation

Arising from origination and reversal of timing differences

86,800

1,464

Tax expense in the income statement

976,588

661,622

The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2023 - higher than the standard rate of corporation tax in the UK) of 25% (2023 - 20.5%).

The differences are reconciled below:

 

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2024

2024
£

2023
£

Profit before tax

4,076,965

3,365,718

Corporation tax at standard rate

1,019,241

689,834

Decrease in UK and foreign current tax from adjustment for prior periods

-

(1,955)

Tax decrease from effect of capital allowances and depreciation

(78)

(258)

Effect of expense not deductible in determining taxable profit (tax loss)

30,370

57,489

Tax decrease arising from group relief

(37,371)

(83,752)

Decrease in UK and foreign current tax from unrecognised temporary difference from a prior period

(35,574)

-

Deferred tax expense relating to changes in tax rates or laws

-

264

Total tax charge

976,588

661,622

11

Tangible assets

Motor vehicles
 £

Plant and machinery
 £

Total
£

Cost or valuation

At 1 July 2023

487,111

14,992

502,103

Additions

278,253

270,803

549,056

Disposals

(34,321)

(305)

(34,626)

At 30 June 2024

731,043

285,490

1,016,533

Depreciation

At 1 July 2023

124,511

8,102

132,613

Charge for the year

104,532

29,921

134,453

Eliminated on disposal

(22,263)

-

(22,263)

At 30 June 2024

206,780

38,023

244,803

Carrying amount

At 30 June 2024

524,263

247,467

771,730

At 30 June 2023

362,192

7,677

369,869


 

 

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2024

Assets held under finance leases and hire purchase contracts

The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:

2024
£

2023
£

Motor vehicles

161,326

205,675

   

12

Stocks

2024
£

2023
£

Work in progress

83,175

-

13

Debtors

Current

2024
£

2023
£

Trade debtors

4,796,220

3,053,939

Other debtors

86,035

383,440

Prepayments

50,132

12,647

Accrued income

172,298

-

Amounts owed by group undertakings

185,271

184,640

 

5,289,956

3,634,666

14

Cash and cash equivalents

2024
£

2023
£

Cash at bank

1,673,786

5,133,215

 

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2024

15

Creditors

Note

2024
 £

2023
 £

Due within one year

 

Loans and borrowings

17

112,646

127,830

Trade creditors

 

2,275,957

2,057,478

Social security and other taxes

 

50,959

36,635

Outstanding defined contribution pension costs

 

9,160

2,663

Other creditors

 

25,260

25,557

Accrued expenses

 

437,159

138,067

Corporation tax

10

467,212

324,443

Deferred income

 

1,230,503

-

 

4,608,856

2,712,673

Due after one year

 

Loans and borrowings

17

241,782

339,877

16

Provisions for liabilities

Deferred tax
£

Total
£

At 1 July 2023

35,100

35,100

Increase (decrease) in existing provisions

86,800

86,800

At 30 June 2024

121,900

121,900

Deferred tax

Deferred tax assets and liabilities:

2024

Liability
£

Fixed asset timing difference

122,873

Short term timing difference

(973)

121,900

2023

Liability
£

Fixed asset timing difference

35,302

Short term timing difference

(202)

35,100

 

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2024

17

Loans and borrowings

Current loans and borrowings

2024
£

2023
£

Bank borrowings

100,000

100,000

Hire purchase contracts

12,646

27,830

112,646

127,830

Non-current loans and borrowings

2024
£

2023
£

Bank borrowings

116,667

216,667

Hire purchase contracts

125,115

123,210

241,782

339,877

The bank loan relates to a CBIL loan, which is secured by way of a debenture over the assets of the company, bearing interest at the base interest rate of 2.42% per annum and repayable by 18 August 2026. The carrying value of the loan as at 30 June 2024 is £216,667 (2023: £316,667).

Hire purchase liabilities with a carrying amount of £137,761 (2023: £151,040) is denominated in sterling with a nominal interest rate of 6.5% to 8.5%. The final instalment is due on 25/04/2027.

Hire purchase liabilities are secured on the vehicles they are financing and are repayable in monthly instalments over 2 to 5 years from the date of advanced.

18

Share capital

Allotted, called up and fully paid shares

 

2024

2023

 

No.

£

No.

£

Ordinary shares of £0.001 each

1,000

1

1,000

1

Ordinary B shares of £1.000 each

1

1

1

1

Ordinary C shares of £0.001 each

77

-

-

-

 

1,078

2

1,001

2

 

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2024

Rights, preferences and restrictions

Ordinary shares have the following rights, preferences and restrictions:
The ordinary shares have the right to participate in a distribution of profits by way of a dividend declared on that class of share. Each ordinary share holder will be entitled to a vote representing a percentage amount of the Ordinary and Ordinary C shares. The Ordinary and Ordinary C shares are entitled to 95% of the vote in the company. As such each share holder is currently entitled to a proportionate vote of 1/1,077 x 95%. The Ordinary share holders are entitled to a distributions on a sale or winding up on the same proportion basis.

Ordinary B shares have the following rights, preferences and restrictions:
Each ordinary B share has a right to participate in a distribution of profits by way of dividend declared on that class of share, is entitled to voting rights equating to 5% and distribution rights on a sale or winding up of 5%.

Ordinary C shares have the following rights, preferences and restrictions:
The ordinary shares have the right to participate in a distribution of profits by way of a dividend declared on that class of share. Each ordinary share holder will be entitled to a vote representing a percentage amount of the Ordinary and Ordinary C shares. The Ordinary and Ordinary C shares are entitled to 95% of the vote in the company. As such each share holder is currently entitled to a proportionate vote of 1/1,077 x 95%. The Ordinary share holders are entitled to a distributions on a sale or winding up on the same proportion basis.

19

Obligations under leases and hire purchase contracts

Finance leases

The total of future minimum lease payments is as follows:

2024
£

2023
£

Not later than one year

12,646

27,830

Later than one year and not later than five years

125,115

123,210

137,761

151,040

Operating leases

The total of future minimum lease payments is as follows:

2024
£

2023
£

Not later than one year

53,550

-

Later than one year and not later than five years

243,150

-

296,700

-

The amount of non-cancellable operating lease payments recognised as an expense during the year was £8,332 (2023 - £Nil).

 

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2024

20

Dividends

Interim dividends paid

2024
£

2023
£

Interim dividend of £6,172 (2023 - £1,110) per each Ordinary shares

6,172,436

1,110,405

Interim dividend of £131,932 (2023 - £143,026) per each Ordinary B shares

131,932

143,026

6,304,368

1,253,431

21

Related party transactions

The company has taken advantage of the exemption permitted by section 33 Related party disclosure of the FRS 102 standard, not to provide disclosures of transactions entered into with other wholly owned members of the group.

Transactions with directors

2024

At 1 July 2023
£

Advances to director
£

At 30 June 2024
£

R P Smart

Directors loan - interest free

19,001

-

19,001

A S Ascott

Directors loan - interest free

14,325

9,000

23,325

2023

At 1 July 2022
£

Advances to director
£

At 30 June 2023
£

R P Smart

Directors loan - interest free

(1,084)

20,085

19,001

A S Ascott

Directors loan - interest free

(5,760)

20,085

14,325

Other transactions with directors

Dividends of £131,932 was paid on Ordinary B Shares during the year (2023: £143,026) to Paul Lewis.

 

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2024

22

Parent and ultimate parent undertaking

The company's immediate parent is Therma-Mech Developments Limited, incorporated in England. Its registered office is Cargo Work Office Block 1, Cumberland Road, Bristol, BS1 6ZA.

The parent undertaking of the smallest and largest Group, which includes the Company and for which Group accounts are prepared, is Therma-Mech Developments Limited, a company incorporated in the United Kingdom. Copies of the group financial statements of Therma-Mech Developments Limited are availible from Companies House.

23

Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £29,627 (2023 - £11,138).

Contributions totalling £9,160 (2023 - £2,663) were payable to the scheme at the end of the year and are included in creditors.