L.S. Transmission Consultancy Limited - Limited company accounts 20.1

REGISTERED NUMBER: 04191630 (England and Wales)

L.S. Transmission Consultancy Limited

Group Strategic Report, Report of the Directors and

Consolidated Financial Statements for the Year Ended 30th June 2021

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Consolidated Statement of Comprehensive Income

10

Consolidated Balance Sheet

11

Company Balance Sheet

12

Consolidated Statement of Changes in Equity

13

Company Statement of Changes in Equity

14

Consolidated Cash Flow Statement

15

Notes to the Consolidated Cash Flow Statement

16

Notes to the Consolidated Financial Statements

17

DIRECTORS:

N Minns

M J Straker

P Papanastasiou

J R Shipley

R A K Salter

SECRETARY:

J R Shipley

REGISTERED OFFICE:

Yorkshire House

York Road

Little Driffield

Driffield

East Yorkshire

YO25 5XA

REGISTERED NUMBER:

04191630 (England and Wales)

AUDITORS:

Smailes Goldie

Chartered Accountants

Statutory Auditor

Regent's Court

Princess Street

Hull

East Yorkshire

HU2 8BA

The directors present their strategic report of the company and the group for the year ended 30th June 2021.

The group's principal business activity is to provide engineering professional services to the electricity sector. Its focus is on the design and survey of overhead lines, underground cables and substation systems from low voltage to extra high voltage in the UK and internationally.

REVIEW OF BUSINESS

2021 was a year of further consolidation and growth for the group as systems and processes were enhanced and two new directors were appointed to the senior management team resulting in improved efficiencies and output. Trading performance increased significantly after a period of uncertainty following the initial outbreak of Covid-19 with turnover for the group increasing by 8.3% to £7.7m, which is back up to pre pandemic levels. Improved efficiencies and changes in the mix of work resulted in increased gross profit margins at 31.5% (2020: 22.3%) and other cost savings meant that operating profit margin increased to 20% (2020: 9.4%).

Key Performance Indicators

The group tightly manages its cash flow and working capital and uses several KPI's to further monitor its performance. These include a range of financial and operational ratios as follows:

- Gross profit/turnover

- Operating profit/turnover

- Debtor days

- Work in progress days

- Cash balance

- Staff utilisation

- Order book profile

The operational performance indicators are commercially sensitive and have not been disclosed.

PRINCIPAL RISKS AND UNCERTAINTIES

The directors are aware of the various risks inherent in the business and meet regularly to consider them. The key business risks are:

Competition risk:

The business is impacted by the supply of professional services into the electricity sector. The risk is mitigated by the relationships in place at all levels with the major suppliers to the sector and offering an extensive range of engineer services.

Credit risk:

The group operates a strict policy of credit checking and reviewing all new and existing commercial customers.

Staff risk:

The group could be exposed to a lack of supply of skilled labour and mitigates this risk by providing a clear career plan and training programme for all levels of staff from graduates through to directors.

Brexit risk:

The group is aware of the uncertainty caused across the business community by the Brexit process. Having assessed the situation it has been concluded that the specific Brexit related risks to the group are relatively low because most of its business is generated in the UK. The situation will continue to be closely monitored.

Impact of COVID-19:

Covid-19 has continued to present challenges throughout the year to 30 June 2021 and to the date of this report with various restrictions on movement and businesses being imposed and changes to Government guidance. Several measures have been put in place across the group to mitigate the risks to staff and the business for the impact of Covid-19. It was necessary to furlough some staff until safe working measures could be put in place, however, the overall impact was less than initially anticipated at the outbreak in March 2020 and the group has performed well despite the challenges faced. Fortunately, the majority of work undertaken by the group is for the UK power industry and is classed as"essential works" and, currently, activity levels remain strong. Whilst the continuing pandemic still presents some uncertainties, the directors have successfully managed the impact up to the date of this report and are confident in the continued success of the company and the group.

FUTURE DEVELOPMENTS

The group is constantly looking to enhance its service offering to enable it to generate increased revenue

opportunities.

BANK FACILITIES

We have been well supported by HSBC Bank plc since the plan to expand the group was implemented, with medium term loan and overdraft facilities having been agreed with them.

ON BEHALF OF THE BOARD:

N Minns - Director

31st March 2022

The directors present their report with the financial statements of the company and the group for the year ended 30th June 2021.

PRINCIPAL ACTIVITIES

The principal activities of the group in the year under review were those of engineering related scientific and technical consultancy.

DIVIDENDS

The directors recommend a final dividend of £Nil for the year ended 30th June 2021. The total distribution of dividends for the year ended 30th June 2021 will be £182,633.

DIRECTORS

The directors shown below have held office during the whole of the period from 1st July 2020 to the date of this report.

N Minns

M J Straker

P Papanastasiou

Other changes in directors holding office are as follows:

J R Shipley - appointed 1st October 2020

R A K Salter - appointed 1st October 2020

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group 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 the group and of the profit or loss of the group 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group 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 group'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 group's auditors are aware of that information.

AUDITORS

The auditors, Smailes Goldie, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

N Minns - Director

31st March 2022

Opinion

We have audited the financial statements of L.S. Transmission Consultancy Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30th June 2021 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated 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 group's and of the parent company affairs as at 30th June 2021 and of the group's 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 group 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 group's and the parent 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 Group 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 Group 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 Group 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 group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company 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 four, 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 group's and the parent 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 group or the parent 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:

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 focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the parent company and the group, including the Companies Act 2006, taxation legislation, data protection, anti-bribery, employment, environmental and health and safety legislation. An understanding of these laws and regulations and the extent of compliance was obtained through discussion with management and inspecting legal and regulatory correspondence.

We assessed the susceptibility of the group's or the parent company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by making enquiries of management 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:

- agreeing financial statement disclosures to underlying supporting documentation;

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

- enquiring of management as to actual and potential litigation and claims; and

- reviewing correspondence with relevant regulators and the company's legal advisors.

Due to the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances 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.

The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves

intentional concealment, forgery, collusion, omission, or misrepresentation.

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.

Martin Overfield FCA (Senior Statutory Auditor)

for and on behalf of Smailes Goldie

Chartered Accountants

Statutory Auditor

Regent's Court

Princess Street

Hull

East Yorkshire

HU2 8BA

31st March 2022

TURNOVER

3

7,676,210

7,089,677

Cost of sales

5,258,134

5,505,361

GROSS PROFIT

2,418,076

1,584,316

Administrative expenses

956,242

1,035,850

1,461,834

548,466

Other operating income

74,906

118,145

OPERATING PROFIT

5

1,536,740

666,611

Interest receivable and similar income

19,195

12,884

1,555,935

679,495

Gain/loss on revaluation of investment property

-

5,000

1,555,935

684,495

Interest payable and similar expenses

6

2,164

6,763

PROFIT BEFORE TAXATION

1,553,771

677,732

Tax on profit

7

152,514

(194,326

)

PROFIT FOR THE FINANCIAL YEAR

1,401,257

872,058

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,401,257

872,058

Profit attributable to:

Owners of the parent

1,398,621

855,833

Non-controlling interests

2,636

16,225

1,401,257

872,058

Total comprehensive income attributable to:

Owners of the parent

1,398,621

855,833

Non-controlling interests

2,636

16,225

1,401,257

872,058

FIXED ASSETS

Intangible assets

11

540,018

635,315

Tangible assets

12

275,703

239,998

Investments

13

-

-

Investment property

14

170,000

170,000

985,721

1,045,313

CURRENT ASSETS

Stocks

15

1,233

1,000

Debtors

16

2,755,396

1,998,044

Cash at bank and in hand

2,870,254

2,322,787

5,626,883

4,321,831

CREDITORS

Amounts falling due within one year

17

949,428

897,917

NET CURRENT ASSETS

4,677,455

3,423,914

TOTAL ASSETS LESS CURRENT LIABILITIES

5,663,176

4,469,227

CREDITORS

Amounts falling due after more than one year

18

-

(30,259

)

PROVISIONS FOR LIABILITIES

22

(23,699

)

(13,115

)

NET ASSETS

5,639,477

4,425,853

CAPITAL AND RESERVES

Called up share capital

23

300

300

Revaluation reserve

24

22,918

22,918

Fair value reserve

24

5,000

5,000

Retained earnings

24

5,588,009

4,372,021

SHAREHOLDERS' FUNDS

5,616,227

4,400,239

NON-CONTROLLING INTERESTS

25

23,250

25,614

TOTAL EQUITY

5,639,477

4,425,853

The financial statements were approved by the Board of Directors and authorised for issue on 31st March 2022 and were signed on its behalf by:

N Minns - Director

FIXED ASSETS

Intangible assets

11

-

-

Tangible assets

12

255,435

200,904

Investments

13

1,797,721

1,797,721

Investment property

14

170,000

170,000

2,223,156

2,168,625

CURRENT ASSETS

Stocks

15

1,233

1,000

Debtors

16

2,362,990

1,654,484

Cash at bank and in hand

2,681,628

2,142,075

5,045,851

3,797,559

CREDITORS

Amounts falling due within one year

17

1,610,797

1,514,609

NET CURRENT ASSETS

3,435,054

2,282,950

TOTAL ASSETS LESS CURRENT LIABILITIES

5,658,210

4,451,575

CREDITORS

Amounts falling due after more than one year

18

-

(30,259

)

PROVISIONS FOR LIABILITIES

22

(24,638

)

(11,638

)

NET ASSETS

5,633,572

4,409,678

CAPITAL AND RESERVES

Called up share capital

23

300

300

Revaluation reserve

24

22,918

22,918

Fair value reserve

24

5,000

5,000

Retained earnings

24

5,605,354

4,381,460

SHAREHOLDERS' FUNDS

5,633,572

4,409,678

Company's profit for the financial year

1,406,527

962,660

The financial statements were approved by the Board of Directors and authorised for issue on 31st March 2022 and were signed on its behalf by:

N Minns - Director

Called up

share

Retained

Revaluation

capital

earnings

reserve

£

£

£

Balance at 1st July 2019

300

4,043,238

22,918

Changes in equity

Dividends

-

(522,050

)

-

Total comprehensive income

-

850,833

-

Balance at 30th June 2020

300

4,372,021

22,918

Changes in equity

Dividends

-

(182,633

)

-

Total comprehensive income

-

1,398,621

-

Balance at 30th June 2021

300

5,588,009

22,918

Fair

value

Non-controlling

Total

reserve

Total

interests

equity

£

£

£

£

Balance at 1st July 2019

-

4,066,456

11,389

4,077,845

Changes in equity

Dividends

-

(522,050

)

(2,000

)

(524,050

)

Total comprehensive income

5,000

855,833

16,225

872,058

Balance at 30th June 2020

5,000

4,400,239

25,614

4,425,853

Changes in equity

Dividends

-

(182,633

)

(5,000

)

(187,633

)

Total comprehensive income

-

1,398,621

2,636

1,401,257

Balance at 30th June 2021

5,000

5,616,227

23,250

5,639,477

Called up

Fair

share

Retained

Revaluation

value

Total

capital

earnings

reserve

reserve

equity

£

£

£

£

£

Balance at 1st July 2019

300

3,945,850

22,918

-

3,969,068

Changes in equity

Dividends

-

(522,050

)

-

-

(522,050

)

Total comprehensive income

-

957,660

-

5,000

962,660

Balance at 30th June 2020

300

4,381,460

22,918

5,000

4,409,678

Changes in equity

Dividends

-

(182,633

)

-

-

(182,633

)

Total comprehensive income

-

1,406,527

-

-

1,406,527

Balance at 30th June 2021

300

5,605,354

22,918

5,000

5,633,572

Cash flows from operating activities

Cash generated from operations

1

964,766

1,538,630

Tax paid

(80,000

)

(131,773

)

Taxation refunds/credits

12,146

787,714

Net cash from operating activities

896,912

2,194,571

Cash flows from investing activities

Purchase of tangible fixed assets

(180,066

)

(68,182

)

Sale of tangible fixed assets

42,658

8,965

Interest received

19,195

12,884

Net cash from investing activities

(118,213

)

(46,333

)

Cash flows from financing activities

Loan repayments in year

(41,435

)

(266,940

)

Interest paid

(2,164

)

(6,763

)

Equity dividends paid

(182,633

)

(522,050

)

Dividends paid to minority interests

(5,000

)

(2,000

)

Net cash from financing activities

(231,232

)

(797,753

)

Increase in cash and cash equivalents

547,467

1,350,485

Cash and cash equivalents at beginning of year

2

2,322,787

972,302

Cash and cash equivalents at end of year

2

2,870,254

2,322,787

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

2021

2020

£

£

Profit before taxation

1,553,771

677,732

Depreciation charges

139,073

168,591

Profit on disposal of fixed assets

(37,370

)

(8,966

)

Gain on revaluation of fixed assets

-

(5,000

)

Goodwill amortisation

95,297

95,297

Finance costs

2,164

6,763

Finance income

(19,195

)

(12,884

)

1,733,740

921,533

Increase in stocks

(233

)

-

(Increase)/decrease in trade and other debtors

(831,427

)

824,642

Increase/(decrease) in trade and other creditors

62,686

(207,545

)

Cash generated from operations

964,766

1,538,630

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 30th June 2021

30.6.21

1.7.20

£

£

Cash and cash equivalents

2,870,254

2,322,787

Year ended 30th June 2020

30.6.20

1.7.19

£

£

Cash and cash equivalents

2,322,787

972,302

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.7.20

Cash flow

At 30.6.21

£

£

£

Net cash

Cash at bank and in hand

2,322,787

547,467

2,870,254

2,322,787

547,467

2,870,254

Debt

Debts falling due within 1 year

(42,961

)

11,176

(31,785

)

Debts falling due after 1 year

(30,259

)

30,259

-

(73,220

)

41,435

(31,785

)

Total

2,249,567

588,902

2,838,469