Thermatic Technical FM Limited - Limited company accounts 23.1

REGISTERED NUMBER: 10650952 (England and Wales)

THERMATIC TECHNICAL FM LIMITED

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Income Statement

9

Other Comprehensive Income

10

Balance Sheet

11

Statement of Changes in Equity

12

Notes to the Financial Statements

13

DIRECTORS:

C R Tennent

P Douglas-Fleet

J Prady

REGISTERED OFFICE:

Unit 3, Sovereign Enterprise Park

King William Street

Salford

M50 3UP

REGISTERED NUMBER:

10650952 (England and Wales)

AUDITORS:

Clarke Nicklin LLP

Chartered Accountants and

Statutory Auditors

Clarke Nicklin House

Brooks Drive

Cheadle Royal Business Park

Cheadle

Cheshire

SK8 3TD

The directors present their strategic report for the year ended 31 December 2022.

REVIEW OF BUSINESS

Thermatic Technical FM Limited has continued to grow during 2022 with Operating Profit increasing from £834,097 to £1,011,806. The company has continued to expand its customer base utilising its strong reputation in the market.

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 increased from 148 in 2021 to 156 in 2022.

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.

ON BEHALF OF THE BOARD:

C R Tennent - Director

5 May 2023

The directors present their report with the financial statements of the company for the year ended 31 December 2022.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of provision of service, maintenance and technical services in respect of heating, ventilation, air-conditioning and related installations.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2022.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2022 to the date of this report.

C R Tennent

P Douglas-Fleet

Other changes in directors holding office are as follows:

L G Morgan - resigned 14 September 2022

J Prady - appointed 31 October 2022

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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 AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are 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 each director 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, Clarke Nicklin LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

C R Tennent - Director

5 May 2023

Opinion

We have audited the financial statements of Thermatic Technical FM Limited (the 'company') for the year ended 31 December 2022 which comprise the Income Statement, Other 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 31 December 2022 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

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, 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 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 the audit:

-	the information given in the Strategic Report and the Report of the Directors 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 Directors 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 Directors.

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 three, 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 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.

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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Procedures to identify risks:

-

enquiring of management concerning the company's procedures relating to: identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of noncompliance; detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;

-

discussing among the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. As part of this discussion, we identified potential for fraud in the following areas: timing of recognition of sales, purchases, amounts recoverable on contracts, posting of unusual journals;and

-

obtaining an understanding of the legal and regulatory frameworks that the company operates in, focusing on those laws and regulations that had a direct effect on the financial statements or that had a fundamental effect on the operations of the company. The key laws and regulations we considered in this context included UK Companies Act, employment law, health and safety, pensions legislation and tax legislation.

The procedures to respond to risks identified included:

-

reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with relevant laws and regulations discussed above;

-

enquiring of management, concerning actual and potential litigation and claims;

-

performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

-

reviewing correspondence with HMRC;

-

testing the timing and matching of income and expense transactions either side of the year end; and

-

in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

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.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulation that are not closely related to events and transactions reflected in the financial statements. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detection one resulting from an error, as fraud may involve deliberate concealment, by for example, forgery or intentional misrepresentation, or through 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 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.

Graham Travis FCA (Senior Statutory Auditor)

for and on behalf of Clarke Nicklin LLP

Chartered Accountants and

Statutory Auditors

Clarke Nicklin House

Brooks Drive

Cheadle Royal Business Park

Cheadle

Cheshire

SK8 3TD

5 May 2023

TURNOVER

19,718,568

16,959,817

Cost of sales

14,218,664

12,158,064

GROSS PROFIT

5,499,904

4,801,753

Administrative expenses

4,488,098

4,007,142

1,011,806

794,611

Other operating income

-

39,486

OPERATING PROFIT

4

1,011,806

834,097

Interest payable and similar expenses

5

4,068

7,940

PROFIT BEFORE TAXATION

1,007,738

826,157

Tax on profit

6

(905

)

(58,701

)

PROFIT FOR THE FINANCIAL YEAR

1,008,643

884,858

PROFIT FOR THE YEAR

1,008,643

884,858

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,008,643

884,858

FIXED ASSETS

Intangible assets

7

154,218

192,405

Tangible assets

8

211,193

229,105

365,411

421,510

CURRENT ASSETS

Debtors

9

6,116,171

4,659,169

Cash at bank

805,973

672,959

6,922,144

5,332,128

CREDITORS

Amounts falling due within one year

10

4,486,945

3,952,034

NET CURRENT ASSETS

2,435,199

1,380,094

TOTAL ASSETS LESS CURRENT LIABILITIES

2,800,610

1,801,604

CREDITORS

Amounts falling due after more than one year

11

(33,536

)

(42,268

)

PROVISIONS FOR LIABILITIES

14

(43,581

)

(44,486

)

NET ASSETS

2,723,493

1,714,850

CAPITAL AND RESERVES

Called up share capital

15

1

1

Retained earnings

16

2,723,492

1,714,849

SHAREHOLDERS' FUNDS

2,723,493

1,714,850

The financial statements were approved by the Board of Directors and authorised for issue on 5 May 2023 and were signed on its behalf by:

C R Tennent - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2021

1

829,991

829,992

Changes in equity

Total comprehensive income

-

884,858

884,858

Balance at 31 December 2021

1

1,714,849

1,714,850

Changes in equity

Total comprehensive income

-

1,008,643

1,008,643

Balance at 31 December 2022

1

2,723,492

2,723,493

1.	STATUTORY INFORMATION

Thermatic Technical FM 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.

The financial statements are presented in Sterling (£).

Going concern

The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The directors have reached this conclusion giving due consideration to the projected future performance of the company, any potential risk that might impact the company's ability to meet its required solvency levels, and the position with regard to financing. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

Financial Reporting Standard 102 - reduced disclosure exemptions

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

•

the requirements of Section 7 Statement of Cash Flows.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Significant judgements and 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 if revision only affects that period, or in the period of the revision and future periods if the revision affects both current and future periods.

There are no judgements considered to have had a significant effect on amounts recognised in the financial statements.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Turnover is recognised when work is completed.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2017, is being amortised evenly over its estimated useful life of ten 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.

Computer software is being amortised evenly over its estimated useful life of 10 years.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Small tools

-

50% on cost

Plant and machinery

-

25% on cost

Fixtures and fittings

-

25% on cost

Motor vehicles

-

25% on reducing balance

Computer equipment

-

33% on cost

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, 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

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to the Income Statement over the relevant period. The capital element of the future payments is treated as a liability.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to the Income Statement in the period to which they relate.

Government grants

Grant income receivable under the Coronavirus Job Retention Scheme ("CJRS") is recognised in the Income Statement on a straight line basis over the furlough period for each relevant employee.

Financial assets

Basic financial assets, including trade debtors, cash and bank balances and amounts owed by group undertakings, are initially recognised at transaction price, 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.

Such assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting period, financial assets measured at amortised cost are assessed for objective evidence of impairment. 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 the Income Statement.

If there is a decrease in the 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 the Income Statement.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party, or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

Financial Liabilities

Basic financial liabilities, including trade creditors and amounts owed to group undertakings, 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 receipts discounted at a market rate of interest.

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 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.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

3.	EMPLOYEES AND DIRECTORS

2022

2021

£

£

Wages and salaries

7,464,249

5,912,014

Social security costs

780,252

717,976

Other pension costs

186,904

149,188

8,431,405

6,779,178

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

2022

2021

Directors

1

3

Other Staff

155

145

156

148

2022

2021

£

£

Directors' remuneration

145,415

204,058

Compensation to director for loss of office

25,000

-

4.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2022

2021

£

£

Hire of plant and machinery

68,205

21,027

Depreciation - owned assets

95,356

55,859

Depreciation - assets on hire purchase contracts

19,555

5,641

Profit on disposal of fixed assets

(170

)

-

Goodwill amortisation

37,467

37,464

Computer software amortisation

720

634

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

2022

2021

£

£

Interest expense

4,068

7,940

6.

TAXATION

Analysis of the tax credit

The tax credit on the profit for the year was as follows:

2022

2021

£

£

Current tax:

Prior year over provision

-

(84,219

)

Deferred tax

(905

)

25,518

Tax on profit

(905

)

(58,701

)

Reconciliation of total tax credit included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2022

2021

£

£

Profit before tax

1,007,738

826,157

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2021 - 19%)

191,470

156,970

Effects of:

Expenses not deductible for tax purposes

67

43

Adjustments to tax charge in respect of previous periods

-

(84,219

)

Group relief

(203,942

)

(41,302

)

Research & development enhancement

-

(87,209

)

Tax super deduction

(6,078

)

(10,103

)

Change in tax rate

10,459

-

Goodwill amortisation

7,119

7,119

Total tax credit

(905

)

(58,701

)

7.	INTANGIBLE FIXED ASSETS

Computer

Goodwill

software

Totals

£

£

£

COST

At 1 January 2022

and 31 December 2022

374,672

7,200

381,872

AMORTISATION

At 1 January 2022

187,332

2,135

189,467

Amortisation for year

37,467

720

38,187

At 31 December 2022

224,799

2,855

227,654

NET BOOK VALUE

At 31 December 2022

149,873

4,345

154,218

At 31 December 2021

187,340

5,065

192,405

8.	TANGIBLE FIXED ASSETS

Fixtures

Small

Plant and

and

tools

machinery

fittings

£

£

£

COST

At 1 January 2022

49,901

145,136

8,746

Additions

27,881

36,021

2,224

Disposals

-

-

-

At 31 December 2022

77,782

181,157

10,970

DEPRECIATION

At 1 January 2022

10,304

60,067

2,349

Charge for year

31,381

40,568

2,548

Eliminated on disposal

-

-

-

At 31 December 2022

41,685

100,635

4,897

NET BOOK VALUE

At 31 December 2022

36,097

80,522

6,073

At 31 December 2021

39,597

85,069

6,397

Motor

Computer

vehicles

equipment

Totals

£

£

£

COST

At 1 January 2022

67,189

60,886

331,858

Additions

24,100

16,406

106,632

Disposals

(13,639

)

(1,904

)

(15,543

)

At 31 December 2022

77,650

75,388

422,947

DEPRECIATION

At 1 January 2022

5,641

24,392

102,753

Charge for year

19,555

20,859

114,911

Eliminated on disposal

(5,115

)

(795

)

(5,910

)

At 31 December 2022

20,081

44,456

211,754

NET BOOK VALUE

At 31 December 2022

57,569

30,932

211,193

At 31 December 2021

61,548

36,494

229,105