The principal activity of the company continues to be the supply and installation of windows and doors for the building trade in Northern Ireland.

During the financial year, the Company earned revenue of £17.6m (2023: £16.7m), achieved a gross profit of £929,550 (2023: £604,603), with a gross margin of 5.28% (2023: 3.6%). Profit before tax was £550,302 (2023: £188,283). Net assets of the company as at 31 December 2024 are £1.9m (2023: £1.5m).

The directors are satisfied with the results achieved with increase in turnover and increase overall profit. It was another year of robust company performance against a dynamic macroeconomic landscape of uncertainty contributed to by the existence of high inflation, high interest rates, cost of living crisis and material and labour supply chain shortages. The company is consistently achieving good results proving that the overall business strategy is a success, with an ability to adapt and continue to grow while recognising that macro-economic factors will always have an impact on business outcomes.

The management of the overall business and the execution of the Company’s strategy are subject to a number of risks. A full risk management process is embedded within this Company. Major risks are identified and a series of measures created and adopted to combat the identified risks and minimise any loss to the Company.  

The principal risks and uncertainties are:

(i) Macroeconomic and UK Economic Market Conditions

Overall market confidence and demand is extremely important for the Company. Demand for its windows and doors is driven by the level of activity in the residential building and construction market for both new builds and retrofits. Replacement of windows and doors within the residential sector would appear to be strongly correlated to the level of household disposable incomes. Changes to government economic and social policy could have a significant impact on consumer confidence and on the Company’s profits. An overall market decline with existing factors such as a slowdown in economic growth, increased interest rates, continuing inflation and cost of living pressures, would result in a fall in demand for the Company’s products.

Business strategies and operational procedures are in place to detect early signs of market change and to enable the Company to adopt to such circumstances through cost and efficiency savings together with appropriate price adjustments. Specific efforts are made to further expand the customer base and to develop further it’s energy efficient product range.

(ii) Availability and increased cost of materials and labour supplies

Failure to procure raw materials on a timely basis would impact on the Company’s ability to meet its customers demands. An inability to control costs or pass on any increase in costs to its customers, appropriately source the requisite labour and/or renegotiate improved terms with suppliers would result in profit margin reductions and a negative impact on the Company’s cash flows and financial condition.

The Company has a dedicated purchasing department that pro-actively seeks out best prices on input materials. It seeks to enter contracts with key suppliers to ensure that price, quality and service demands are met. Where possible, materials are sourced from different suppliers to reduce the level of supply risk.

Management is very aware that the success of the Company is dependent on having a highly skilled, diverse and competent labour supply. Management work with the entities which fulfil their labour needs in order to have an inclusive and equitable working environment, allowing workers to be engaged and challenged thereby enabling them to positively impact on the Company’s business.

(iii) Foreign exchange risk

The directors see currency fluctuations due to purchasing requirements as the main exchange risk.

Where possible agreements, purchases and settlements are made in pound sterling to mitigate exchange rate volatility.

(iv) Competitive pressures

Increased competition could reduce demand for the company’s products and thereby have an adverse effect on cash flows.

Competitive risk is managed by building up strong partnerships with its customers and providing them with the highest standard of quality and service from order placement right through to product fitting and thereafter. Management adopts a sustainable approach striving to improve and promote an ever - increasing range of energy efficient products and thereby increasing its customer base.

(v) Customer credit risk

Default by a large customer or multiple smaller customers could result in material bad debts thereby having an adverse effect on the company's cash flows and working capital requirements.

The Company has implemented internal credit control policies that require appropriate credit checks on new customers before the acceptance of any orders and regular credit reviews are carried out for existing customers. This credit risk is managed on a proactive basis through the sales process through to debt recovery and collection. The company acknowledges the importance of maintaining close relationships with its key customers thereby facilitating the detection of early signs of potential payment difficulties.

(vi) Regulatory risks including Health & Safety

The Company could be adversely impacted upon by the crystallisation of unexpected corporate or regulatory risks. The Company’s brand could suffer reputational damage as well as the imposition of penalty breaches. These include Health & Safety, Reputational and Environmental risks or other legal, taxation and compliance matters.

Procedures and policies are in place to support compliance with all relevant regulations. Such include regular training and communication on policy compliance and monitoring procedures to ensure adherence with requirements. Health & Safety matters and incidents are fully documented, audits are carried out and assistance from outside consultants is sought when required. The Company maintains a strong safety culture to avoid accidents to its workers, surrounding personnel and members of the public.

(vii) Information security and cyber risk

A breach of IT security (externally or internally) could result in an inability to operate systems and processes effectively (e.g. viruses) or the release of inappropriate information (e.g. hackers). Breaches could lead to damage to the Company’s reputation, potential loss of customers and revenue and may also expose the Company to liability and regulatory scrutiny.

Ongoing investment is taking place in cyber risk detection and prevention tools. Comprehensive application and system controls have been developed and are continuously being upgraded, including password and safe-use policies, internet usage monitoring and anti-malware usage, cyber awareness/IT security campaign active for all personnel, security of servers and comprehensive back- up systems.

(viii) Sustainability

Management is very conscious that without framing decisions in terms of financial, environmental, social and human effects then there is a risk that the resilience and long-term value of the Company could be undermined and result in a lack of greater prosperity being achieved.

Sustainability is one of the principal risks in the Company’s risk management strategy. All aspects of the Company's operations are considered with the aim to minimize the impact on the environment. Operations are tailored to minimize the use of energy and water, use materials that are environmentally friendly, use recycled materials where possible, minimize waste and continually reduce emissions. Sustainability is considered in the selection of the materials that go into the Company's products.

In the case of each director in office at the date the Directors' Report is approved:

- so far as the director is aware, there is no relevant audit information of which the company's auditors are unaware; and

- they have taken all the 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

As part of our audit plan we identified and assessed the risks of material misstatement of the financial statements from irregularities, whether due to fraud or error, and discussed these between our audit team members. We then designed and performed audit procedures responsive to those risks, including obtaining audit evidence sufficient and appropriate to provide a basis for our opinion.

As part of our audit work, we obtained an understanding of the legal and regulatory frameworks within which the company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. Among the laws and regulations we considered in this context were the Companies Act 2006, HMRC Tax Legislation and Health and Safety. We assessed the requireed compliance with these laws and regulations as part of our audit procedures on the related financial statement items.

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which might be fundamental to the company's ability to operate or to avoid a material penalty. We also considered the opportunities and incentives that may exist within the company for fraud. The laws and regulations considered in this context would include, General Data Protection Regulation (GDPR), and employment legislation.

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of management and inspection of regulatory and legal correspondence, if any. Our audit procedures to respond to risks  include  enquiries of management, sample testing, reviewing accounting estimates, reviewing minutes of management meetings.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.

We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

Tangible assets are initially stated at cost or at valuation and subsequently measured at cost, less accumulated depreciation and any impairment losses. The charge to depreciation is calculated to write off the original cost or valuation of tangible assets, less their estimated residual value, over their expected useful lives as follows:

The carrying values of tangible fixed assets are reviewed annually for impairment in periods if events or changes in circumstances indicate the carrying value may not be recoverable.

Impairment

At each reporting date fixed assets are reviewed to determine whether there is any indication that those assets  have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or loss.

If an impairment loss subsequently reverses, the carry amount of the asset is increased to the revised estimate  of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

The company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties and loans to and from fellow group companies or related parties.

The Company does not have any financial assets or liabilities measured at fair value through profit and loss at the current year end or prior year end.

Future year profits of the company will be taxed at the rate of 25%.

Deferred taxes at the balance sheet date have been measured using enacted tax rates and reflected in these financial statements.

All anounts shown under debtors fall due for payment within 1 year.

Trade debtors are stated after provisions for impairment of £136,232 (2023:£132,870).

Amounts owed by group undertakings and related parties are unsecured, interest free, have no fixed date of repayment and are repayable on demand.

The repayment terms of trade creditors vary between on demand and ninety days. No interest is payable on trade creditors.

Amounts owed to group undertakings and related parties are unsecured, interest free and repayable on demand.

Tax and national insurance are subject to the terms of the relevant legislation. Interest accrues on late payment.

The terms of the accruals are based on the underlying contracts.

Allied Irish Bank facilities are secured with fixed and floating charges over the assets and property of the Company.

Warranty provision:

The company offers a ten year warranty on joinery products which it sells. A provision is recognised for the expected warranty claims based on past experience of costs incurred and discounted for time factor. Assumptions used to calculate the provision are based on the most up to date current information available and on the best knowledge and experience of management.

Transactions with group and related Companies:

Sales with group companies £682,244 (2023: £551,384)

Sales with related companies £60,000 (2023: £50,000)

Purchases from group companies £14,459,008 (2023: £13,679,055)

Purchase form related companeis £45,900 (2023: £42,900)

Balances with Group and Related Companies:

Amounts owed by Group companies £2,825,574 (2023: £2,130,424)

Amount owed to Group companies £16,551,443 (2023: £17,223,574)

Amount owed by related parties £11,952,933 (2023: £11,575,061)

Amount owed to related parties £57,262 (2023:£42,862)