CR Smith the double glazing and conservatory supplier has sustained a hefty underlying loss amid tough trading conditions, newly filed accounts have revealed.

Accounts for CR Smith Glaziers (Dunfermline) show the company made a pre-tax loss of £1.6 million in the year to 28 February 2014, stripping out the effect of a one-off payment of £4.3 million from a third party.

The company made £438,000 pre-tax profit in the preceding 11 month period.

Writing in the accounts, the company's owner Gerard Eadie noted that CR Smith operates in an extremely competitive market in a difficult financial climate for the sector.

However, he added: "A non-recurring sum received from a third party amounting to £4.3m during the year has allowed the company to make significant investment that ensures quality is maintained at a high level."

The company said the payment related to historic transactions.

In the accounts for the preceding period Mr Eadie had written: "The company is still incurring rectification costs, which are being expensed as incurred, relating to a deficient supplier-provided component incorporated in products manufactured prior to September 2003. Legal action previously initiated to recover these costs has ceased since the period end following an out-of-court settlement with the supplier."

The company said yesterday the legal action had been dealt with in the accounts for the 11 months to 28 February 2013.

Asked to confirm the historic transactions referred to were not related to the legal action the company said:" The details of the historic transactions referred to are commercially sensitive."

In the accounts for the year to March 2012 CR Smith said a court case against an unnamed supplier over allegedly deficient components incorporated in products made before September 2003 had been ruled in its favour but a determination as to causation and damages was not expected until October 2013. The firm said it had presented a claim to the supplier for around £17.9m.

In the Strategic Report in the latest accounts Mr Eadie noted the company manages the risk associated with operating in a competitive market by offering a wide range of goods and supplying a high quality of product and service to customers.

He wrote: "The directors recognise the difficult financial climate facing both the national economy and the business sector the company operates in."

CR Smith operates in a sector in which the state of consumer sentiment and the housing market are important factors.

Mr Eadie's brother, George, said: "The directors are pleased with the performance of the business and results for the period to February 2014.

"The results for the period and the investment decisions in the brand, product, people and capital expenditure over the year means the company is well placed."

Turnover increased to £19.6m in the year to February 2014, from £17.3m in the preceding period.

The company noted distribution costs increased by £1.2m to £4.5m in the year, reflecting significant extra investment in the CR Smith brand with activity covering advertising, website development and the launch of new windows and doors.

The company said it had a year end order book of £5m in February 2014 and a continuing trend of increased sales. The order book at the end of February 2015 was up slightly on the same time last year.

CR Smith said it will take delivery of a £1m state-of-the-art smart window and door manufacturing machine this month.

Administrative costs rose by £1m to £2.9m in the year to February 2014 amid increased investment in staff.

Directors' remuneration increased to £506,390 from £318,248.

The highest paid director earned total remuneration of £197,625, up from £154,233.

CR Smith can trace its roots to 1917 when it began as a picture framing shop in Alloa and a glazing workshop in Dunfermline.

It has been owned by Gerard Eadie since 1977.

CR Smith sold its manufacturing operation in November 2012 to a company owned by Mr Eadie's family for £640,000, to focus on the installation of windows, doors and conservatories.

CR Smith Glaziers (Dunfermline) and CR Smith Manufacturing employed an average 360 people in total in the period to February 2014.