Thomas Contracting Limited - Limited company accounts 20.1

REGISTERED NUMBER: 04496458 (England and Wales)

Thomas Contracting Limited

Strategic Report, Report of the Director and

Financial Statements

for the Year Ended 31 May 2020

Page

Company Information

1

Strategic Report

2

Report of the Director

3

Report of the Independent Auditors

4

Statement of Comprehensive Income

6

Balance Sheet

7

Statement of Changes in Equity

8

Cash Flow Statement

9

Notes to the Cash Flow Statement

10

Notes to the Financial Statements

11

DIRECTOR:

Mr W L Thomas

SECRETARY:

Mrs S E Thomas

REGISTERED OFFICE:

Tai Hirion

Llwybr Hir

Caerwys

Flintshire

CH7 5BL

REGISTERED NUMBER:

04496458 (England and Wales)

AUDITORS:

Salisbury & Company Business Solutions Limited

Statutory Auditors

Chartered Accountants

Irish Square

Upper Denbigh Road

St Asaph

Denbighshire

LL17 0RN

The strategic report for the year is presented in the group financial statements for Thomas Holdings (North West)

Limited.

ON BEHALF OF THE BOARD:

Mr W L Thomas - Director

9 September 2020

The director presents his report with the financial statements of the company for the year ended 31 May 2020.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of contracting services.

DIVIDENDS

No dividends will be distributed for the year ended 31 May 2020.

DIRECTOR

Mr W L Thomas held office during the whole of the period from 1 June 2019 to the date of this report.

POLITICAL DONATIONS AND EXPENDITURE

During the year the company made donations to local charitable organisations totalling £315 (2019: £6,535).

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Strategic Report, the Report of the Director and the financial statements in

accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director

has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting

Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The

Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the director must not

approve the financial statements unless he is 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 director is

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 director is 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 him to ensure that the financial statements comply with the Companies Act 2006. He is 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 AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act

2006) of which the company's auditors are unaware, and he has taken all the steps that he ought to have taken as a

director in order to make himself aware of any relevant audit information and to establish that the company's auditors

are aware of that information.

AUDITORS

The auditors, Salisbury & Company Business Solutions Limited, will be proposed for re-appointment at the forthcoming

Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr W L Thomas - Director

9 September 2020

Opinion

We have audited the financial statements of Thomas Contracting Limited (the 'company') for the year ended

31 May 2020 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in

Equity, Cash Flow Statement and Notes to the Cash Flow Statement, 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 31 May 2020 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 Auditors' 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to

you where:

-	the director's use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the director has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The director is responsible for the other information. The other information comprises the information in the Strategic

Report and the Report of the Director, but does not include the financial statements and our Report of the Auditors

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.

Opinions on other matters 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 the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements.

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 Report of the Director.

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 director's remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page three, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic

alternative but to do so.

Auditors' 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 a Report of the Auditors 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.

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 Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the

Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those

matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent

permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's

members as a body, for our audit work, for this report, or for the opinions we have formed.

Aled Roberts FCA (Senior Statutory Auditor)

for and on behalf of Salisbury & Company Business Solutions Limited

Statutory Auditors

Chartered Accountants

Irish Square

Upper Denbigh Road

St Asaph

Denbighshire

LL17 0RN

9 September 2020

TURNOVER

20,864,746

17,206,879

Cost of sales

(19,672,638

)

(15,863,409

)

GROSS PROFIT

1,192,108

1,343,470

Administrative expenses

(560,842

)

(408,884

)

631,266

934,586

Other operating income

14,700

16,120

OPERATING PROFIT

4

645,966

950,706

Interest payable and similar expenses

5

-

(15,652

)

PROFIT BEFORE TAXATION

645,966

935,054

Tax on profit

6

-

-

PROFIT FOR THE FINANCIAL YEAR

645,966

935,054

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

645,966

Prior year adjustment

(868,494

)

TOTAL COMPREHENSIVE INCOME SINCE LAST ANNUAL REPORT

66,560

FIXED ASSETS

Intangible assets

8

5,000

7,500

CURRENT ASSETS

Stocks

9

1,514,699

2,690,087

Debtors

10

2,274,431

2,153,650

3,789,130

4,843,737

CREDITORS

Amounts falling due within one year

11

2,288,503

3,991,576

NET CURRENT ASSETS

1,500,627

852,161

TOTAL ASSETS LESS CURRENT LIABILITIES

1,505,627

859,661

CAPITAL AND RESERVES

Called up share capital

14

1

1

Retained earnings

15

1,505,626

859,660

SHAREHOLDERS' FUNDS

1,505,627

859,661

The financial statements were approved by the director and authorised for issue on 9 September 2020 and were signed by:

Mr W L Thomas - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 June 2018

1

793,100

793,101

Prior year adjustment

-

(868,494

)

(868,494

)

As restated

1

(75,394

)

(75,393

)

Changes in equity

Total comprehensive income

-

935,054

935,054

Balance at 31 May 2019

1

859,660

859,661

Changes in equity

Total comprehensive income

-

645,966

645,966

Balance at 31 May 2020

1

1,505,626

1,505,627

Cash flows from operating activities

Cash generated from operations

1

(215,285

)

321,002

Interest paid

-

(15,652

)

Net cash from operating activities

(215,285

)

305,350

Cash flows from financing activities

Amount introduced by directors

-

1,000

Amount withdrawn by directors

(463,171

)

(43,000

)

Intercompany balances

1,176,668

(526,874

)

Net cash from financing activities

713,497

(568,874

)

Increase/(decrease) in cash and cash equivalents

498,212

(263,524

)

Cash and cash equivalents at beginning of year

2

(537,431

)

(273,907

)

Cash and cash equivalents at end of year

2

(39,219

)

(537,431

)

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2020

2019

as restated

£

£

Profit before taxation

645,966

935,054

Depreciation charges

2,500

2,500

Finance costs

-

15,652

648,466

953,206

Decrease/(increase) in stocks

1,175,388

(920,164

)

Increase in trade and other debtors

(433,266

)

(223,500

)

(Decrease)/increase in trade and other creditors

(1,605,873

)

511,460

Cash generated from operations

(215,285

)

321,002

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of

these Balance Sheet amounts:

Year ended 31 May 2020

31/5/20

1/6/19

£

£

Bank overdrafts

(39,219

)

(537,431

)

Year ended 31 May 2019

31/5/19

1/6/18

as restated

£

£

Bank overdrafts

(537,431

)

(273,907

)

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1/6/19

Cash flow

At 31/5/20

£

£

£

Net cash

Bank overdrafts

(537,431

)

498,212

(39,219

)

(537,431

)

498,212

(39,219

)

Total

(537,431

)

498,212

(39,219

)

1.	STATUTORY INFORMATION

Thomas Contracting Limited is a private company, limited by shares , registered in England and Wales. The

company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Going concern

Within the financial year the World Health Organisation (WHO) declared Covid-19 as a worldwide pandemic. In

relation to this the directors have reviewed the company's performance throughout the period and subsequent to

the year end and, as a result believe that the preparation of the financial statements on the going concern basis

is appropriate.

Turnover

Turnover represents net invoiced sales of materials and services, excluding value added tax.

Turnover, derived from the principal activity, is calculated on the basis of the value of work executed during the

period, including retentions.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2003, is being amortised evenly over its estimated useful life of twenty years.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost

less any accumulated amortisation and any accumulated impairment losses.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and

slow moving items.

Work in progress is valued at the lower of cost and net realisable value.

Cost includes all direct expenditure and an appropriate proportion of fixed and variable overheads.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive

Income, except to the extent that it relates to items recognised in other comprehensive income or directly in

equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or

substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the

balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from

those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws

that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal

of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they

will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the

lease.

Long-term contracts

Profit on long-term contracts is taken as the work is carried out if the final outcome can be assessed with

reasonable certainty. The profit included is calculated on a prudent basis to reflect the proportion of the work

carried out at the year end, by recording turnover and related costs as contract activity progresses. Turnover is

calculated as that proportion of total contract value which costs incurred to date bear to total expected costs for

that contract. Revenues derived from variations on contracts are recognised only when they have been

accepted by the customer. Full provision is made for losses on all contracts in the year in which they are first

foreseen.

Retentions

Retention recognition policy follows that of BIM51520, whereby the recognition of retentions is deferred until

their receipt becomes virtually certain.

Debtors

Short term debtors are measured at transaction price, less any impairment.

Creditors

Short term trade creditors are measured at the transaction price. Other financial liabilities, including loans, are

measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost.

Provisions for liabilities

Provisions are recognised when the company has a present obligation (legal or constructive) as a result of a

past event, it is probable that the company will be required to settle the obligation, and a reliable estimate can

be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present

obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the

obligation.

Employee benefits

Short term employee benefits and contributions to defined contribution plans are recognised as an expense in

the period in which they are incurred.

3.	EMPLOYEES AND DIRECTORS

2020

2019

as restated

£

£

Wages and salaries

2,332,635

2,298,908

The average number of employees during the year was as follows:

2020

2019

as restated

Production

66

65

Administration and management

11

10

77

75

2020

2019

as restated

£

£

Director's remuneration

-

-

4.	OPERATING PROFIT

The operating profit is stated after charging:

2020

2019

as restated

£

£

Plant and skip hire

2,417,748

1,756,144

Other operating leases

-

2,742

Goodwill amortisation

2,500

2,500

Auditors' remuneration

9,000

5,000

Auditors' remuneration for non audit work

33,258

36,000

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

2020

2019

as restated

£

£

Interest on overdue tax

-

15,652

6.

TAXATION

Analysis of the tax charge

No liability to UK corporation tax arose for the year ended 31 May 2020 nor for the year ended 31 May 2019.

7.	PRIOR YEAR ADJUSTMENT

In the year to 31 May 2016 the company received an Accelerated Payment Notice (APN) from HM Revenue and

Customs relating to certain tax planning undertaken several years ago.

During the 2019 year, an agreement was reached with HMRC to settle the position. A prior year adjustment of

£868,494 was made in relation to this. Settlement was made in full by 31st May 2020.

8.	INTANGIBLE FIXED ASSETS

Goodwill

£

COST

At 1 June 2019

and 31 May 2020

50,000

AMORTISATION

At 1 June 2019

42,500

Amortisation for year

2,500

At 31 May 2020

45,000

NET BOOK VALUE

At 31 May 2020

5,000

At 31 May 2019

7,500

9.

STOCKS

2020

2019

as restated

£

£

Work-in-progress

1,514,699

2,690,087

10.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2020

2019

as restated

£

£

Trade debtors

104,728

63,852

Retentions

762,601

571,117

Amounts owed by group undertakings

985,249

1,297,734

VAT

421,853

211,447

Prepayments

-

9,500

2,274,431

2,153,650

11.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2020

2019

as restated

£

£

Bank loans and overdrafts (see note 12)

39,219

537,431

Trade creditors

1,257,606

2,019,414

Amounts owed to group undertakings

966,105

101,922

Social security and other taxes

(33,831

)

65,514

EBT Settlement

-

744,720

Directors' current accounts

4,500

467,671

Accruals and deferred income

54,904

54,904

2,288,503

3,991,576

12.

LOANS

An analysis of the maturity of loans is given below:

2020

2019

as restated

£

£

Amounts falling due within one year or on demand:

Bank overdrafts

39,219

537,431

13.	SECURED DEBTS

The following secured debts are included within creditors:

2020

2019

as restated

£

£

Bank overdrafts

39,219

537,431

The bank overdraft is secured by way of Limited Guarantees given by the director for £150,000 dated 7 January

2015, £250,000 dated 14 January 2013 and £500,000 dated 16 April 2009, a debenture dated 2 January 2002,

and a cross guarantee and debenture between the group companies dated 6 February 2013 and 8 August 2014.

14.	CALLED UP SHARE CAPITAL

Allotted and issued:

Number:

Class:

Nominal

2020

2019

value:

as restated

£

£

1

Share capital 1

£1

1

1

15.

RESERVES

Retained

earnings

£

At 1 June 2019

859,660

Profit for the year

645,966

At 31 May 2020

1,505,626

16.	ULTIMATE PARENT COMPANY

Thomas Holdings (North West) Limited is regarded by the director as being the company's ultimate parent

company.

17.	RELATED PARTY DISCLOSURES

Key management personnel of the entity or its parent (in the aggregate)

During the year, the company paid amounts totalling £191,729 (2019: £246,981) to companies in which key sub-contractors are directors, being Lowri Consulting Ltd and J A Clarke Consulting Ltd.

All other related party transactions are under the normal course of business.

18.	ULTIMATE CONTROLLING PARTY

The controlling party is Mr W L Thomas.