TEAM Precision Pipe Assemblies Limited - Period Ending 2020-09-30
TEAM Precision Pipe Assemblies Limited - Period Ending 2020-09-30
Registration number:
for the
Year Ended
TEAM Precision Pipe Assemblies Limited
Contents
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Company Information |
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Directors' Report |
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Strategic Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Profit and Loss Account |
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Statement of Comprehensive Income |
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Balance Sheet |
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Statement of Changes in Equity |
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Notes to the Financial Statements |
TEAM Precision Pipe Assemblies Limited
Company Information
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Directors |
Dr N C Trilk M P Urquhart |
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Registered office |
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Solicitors |
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Bankers |
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Auditors |
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TEAM Precision Pipe Assemblies Limited
Directors' Report for the Year Ended 30 September 2020
The directors present their report and the financial statements for the year ended 30 September 2020.
Directors of the company
The directors who held office during the year were as follows:
Going concern
In accordance with the Financial Reporting Council’s ‘Going Concern & Liquidity Risk Guidance for Directors of UK Companies 2009,’ the directors of all companies are now required to provide disclosures regarding the going concern basis of accounting. The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and have continued to adopt the going concern basis in preparing the financial statements.
The directors have considered the impact of the COVID-19 pandemic and detailed the effects and countermeasures taken in the Strategic Report. They have concluded that while there has been impact in the medium term, the actions taken mean that there should be no lasting effect on the results or position.
Disclosure of information to the auditors
Each director has taken 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. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.
Reappointment of auditors
Hazlewoods have expressed their willingness to continue in office.
Approved by the Board on
M P Urquhart
Director
TEAM Precision Pipe Assemblies Limited
Strategic Report for the Year Ended 30 September 2020
The directors present their strategic report for the year ended 30 September 2020.
Principal activity
The principal activity of the company is the manufacture of manipulated aluminium pipe and tube assemblies for the automotive heating, ventilation, and air conditioning market; and copper and aluminium pipes and assemblies for the road transport refrigeration market.
Business review and the impact of COVID-19
During the year the company achieved turnover of £7.1m (2019 - £9.7m) at a gross profit margin of 17.6% (2019 - 26.5%), resulting in a gross profit of £1.3m (2019 - £2.6m). Administrative expenses were incurred during the year of £2.5m (2019 - £2.6m), resulting in an operating loss after other operating income of £732k (2019 - £72k).
As a supplier to the automotive sector, the company was significantly affected by reduced demand for motor cars both in the UK and other markets. The loss reported for the year arose as a result of this worldwide reduced demand coupled with a delayed introduction of new vehicle platforms that it has been nominated on.
Key performance indicators
The company’s directors are of the opinion that key performance indicators are important. The company uses a number of indicators to monitor and improve the development, performance, and position of the business. The indicators are reviewed and updated to meet changes in the internal and external environments.
As a result of the anticipated impacts of COVID-19, the company introduced a series of additional specific daily KPIs to identify and provide early warning of any effects of the virus and lockdown. These KPIs enabled actions to be taken rapidly in order to mitigate the immediate effects of the pandemic. The same KPIs continue to provide management information required to adjust actions as the effects of government policies impact on its markets.
In addition to the additional KPIs and matching staff levels to customer demand through the use of the Coronavirus Job Retention Scheme (“CJRS”), the company runs a forward forecast model. The forecast considers a number of scenarios and identifies the funding and headroom required for the company to trade through a period of reduced demand.
Principal risks and uncertainties
The company is subject to the same general risks and uncertainties that affect any other business such as legislative changes, shifts in general economic conditions and the impact of competition.
In addition to the company’s principal business risks usually considered in this section, COVID-19 has generated its own specific risks. These fall into three main categories:
Staff
The safe operation of the company’s manufacturing and support activities is essential both to ensure the health and safety of the workforce and for the company to retain the skills that it needs. Revised working practices are in place at the company’s factory to enable safe working in line with current government guidelines.
Profitability
The company has experienced a period of diminished profitability as a result of significantly reduced customer demand and associated revenues. It has closely monitored customer schedules and adjusted staff levels accordingly. Where possible, the CJRS has been used to achieve required cost savings.
Working capital
A knock-on effect of reduced revenues and gross margins has been an overall reduction in working capital for the company. Using the likely returns to pre-COVID-19 demand levels to create a new forward forecast, the company has worked closely with its bank to secure a facility under the Coronavirus Business Interruption Loan Scheme (“CBILS”).
TEAM Precision Pipe Assemblies Limited
Strategic Report for the Year Ended 30 September 2020
In addition to the specific COVID-19 risks detailed, the other principal risks and uncertainties that may impact the company are detailed below. There may be other risks and uncertainties which are not yet known, or which are currently considered to be immaterial but later turn out to have a material impact.
External risks
The company's operations are subject to a wide range of laws and regulations including employment, environmental and health and safety legislation. The company pays careful attention to legislative and proposed changes governing materials used in the manufacturing process and end uses, and works closely with customers to adapt products to meet these. Where required, the company uses external advisors to provide additional expert support for its management team in areas such as health and safety and employment.
Raw materials costs are based on global exchange pricing. The company manages exposure to changing prices both by buying forward on fixed price contracts and managing pricing through raw material price escalator mechanisms in major sales contracts. Management monitors sales performance and order intake weekly in order to pre-empt any changes in market demand.
Brexit continued to be one of the most significant economic events for the UK, with its final effects still unknown during the year under review. The directors continuously assessed the possible risks using a framework that considered both probability and impact on the business. As the final form of the exit is now more certain, appropriate actions are being taken by the company and continue to be reviewed.
Operational risks
The company operates in a competitive market both in the UK and in its export markets. A strong focus on new technical product development and maintaining strong customer relationships helps to reduce the risk of losing market share.
The company's ability to manufacture and sell products is governed by a predictable and constant supply of raw materials. Continuity of this supply is managed using business systems to forecast future materials requirements and is ensured through regular liaison between production planning, procurement, and suppliers. As a manufacturing business, the company is dependent on its key production equipment. To mitigate this risk, it operates a planned maintenance and replacement programme. In addition, catastrophic loss risk is insured against.
TEAM supplies the automotive and refrigeration markets and these demand best pricing and quality assurance. The company continues to invest in quality systems and operates a quality circle. To remain competitive, the company continuously improves its processes and adds automation where justified in order to remove cost and waste from its operations.
Financial risks
The company finances its operations from a combination of cash reserves from retained profits, bank borrowings, debtor financing, and group facilities.
The company is subject to the credit risk of bad debts arising from non-payment by its customers. Risk is tightly managed internally by the finance team.
The company is exposed to currency risk resulting from fluctuations in foreign exchange rates in respect of products sourced in one currency and sold in another. The company has primary exposure to the Euro, with additional exposure to the US Dollar. The company manages its short-term risk using mechanisms available to a company of its size including balancing purchases and sales in certain currencies. Over the longer term, the risk remains, although steps can be taken to reduce this through purchasing policy without adversely affecting the competitiveness of the business.
TEAM Precision Pipe Assemblies Limited
Strategic Report for the Year Ended 30 September 2020
Outlook
Worldwide automotive demand has now started to recover as government vaccination programs to combat the COVID-19 pandemic are beginning to have the desired effect. As orders increase further, so TEAM is positioned to meet its customers' growing schedules. In addition, the previously delayed new vehicle platforms have now commenced production and turnover and profitability is forecast to first return, and then increase, as volumes grow more rapidly than initially planned. The company expects to return to profitable operation in the second half of the current year.
Going concern and financial position
The directors have assessed the company’s usual sources of debt, debtor financing, and internal cash generation, along with the CBILS facility secured in the year and determined that they are confident that the company has adequate financial resources to continue to operate for the foreseeable future and is financially sound. At the end of the year net assets were £718k (2019 - £1.4m).
Approved by the
.........................................
Director
TEAM Precision Pipe Assemblies Limited
Statement of Directors' Responsibilities
The directors are responsible for preparing the Strategic Report, Directors' Report 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 apply them consistently; |
• | make judgements and accounting estimates that are reasonable and prudent; |
• | state whether applicable UK Accounting Standards has been followed, subject to any material departures disclosed and explained in the financial statements; and |
• | 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.
TEAM Precision Pipe Assemblies Limited
Independent Auditor's Report to the Members of TEAM Precision Pipe Assemblies Limited
Opinion
We have audited the financial statements of TEAM Precision Pipe Assemblies Limited (the 'company') for the year ended 30 September 2020, which comprise the Profit and Loss Account, Statement of 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 30 September 2020 and of its loss 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 Auditor’s 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:
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the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or |
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the directors have 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. |
However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the company’s ability to continue as a going concern. For example, it is difficult to evaluate all of the potential implications of the current COVID-19 outbreak on the company’s trade, employees, customers, suppliers and the wider economy.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report 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.
TEAM Precision Pipe Assemblies Limited
Independent Auditor's Report to the Members of TEAM Precision Pipe Assemblies Limited
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
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the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
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the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our 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 and the Directors' Report.
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 6, 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 is 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.
Auditor’s 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 an auditor’s report 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 auditor's report.
TEAM Precision Pipe Assemblies Limited
Independent Auditor's Report to the Members of TEAM Precision Pipe Assemblies Limited
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 an auditor’s report 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.
For and on behalf of
Windsor House
Bayshill Road
Cheltenham
GL50 3AT
TEAM Precision Pipe Assemblies Limited
Profit and Loss Account for the Year Ended 30 September 2020
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Note |
2020 |
2019 |
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Turnover |
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Cost of sales |
( |
( |
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Gross profit |
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Administration expenses |
( |
( |
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Other operating income |
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- |
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Operating loss |
( |
( |
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Interest payable and similar charges |
( |
( |
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Loss before tax |
( |
( |
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Taxation |
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|
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Loss for the financial year |
( |
( |
The above results were derived from continuing operations.
TEAM Precision Pipe Assemblies Limited
Statement of Comprehensive Income for the Year Ended 30 September 2020
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2020 |
2019 |
|
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Loss for the year |
( |
( |
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(Deficit)/surplus on property revaluation |
- |
( |
|
Total comprehensive income for the year |
( |
( |
TEAM Precision Pipe Assemblies Limited
(Registration number: 06936831)
Balance Sheet as at 30 September 2020
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Note |
2020 |
2019 |
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Fixed assets |
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Tangible assets |
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Current assets |
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Stocks |
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Debtors |
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Cash at bank and in hand |
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Creditors: Amounts falling due within one year |
( |
( |
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Net current (liabilities)/assets |
( |
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Total assets less current liabilities |
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Creditors: Amounts falling due after more than one year |
( |
( |
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Provisions for liabilities |
- |
( |
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Net assets |
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Capital and reserves |
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Called up share capital |
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Profit and loss account |
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Total equity |
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Approved and authorised by the
M P Urquhart
Director
TEAM Precision Pipe Assemblies Limited
Statement of Changes in Equity for the Year Ended 30 September 2020
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Share capital |
Revaluation reserve |
Profit and loss account |
Total |
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At 1 October 2018 |
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Loss for the year |
- |
- |
( |
( |
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Other comprehensive income |
- |
( |
- |
( |
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Transfer of realised profits |
- |
(706) |
706 |
- |
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At 30 September 2019 |
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- |
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Share capital |
Revaluation reserve |
Profit and loss account |
Total |
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At 1 October 2019 |
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- |
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Loss for the year |
- |
- |
( |
( |
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At 30 September 2020 |
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- |
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TEAM Precision Pipe Assemblies Limited
Notes to the Financial Statements for the Year Ended 30 September 2020
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General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office and principal place of business is:
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Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006.
Basis of preparation
These financial statements have been prepared using the historical cost convention except for, where disclosed in these accounting policies, certain items that are shown at fair value.
The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the company operates. Monetary amounts in these financial statements are rounded to the nearest thousand Pounds.
Summary of disclosure exemptions
The company meets the definition of a qualifying entity under FRS 102 and has therefore taken advantage of the disclosure exemptions available to it in respect of its financial statements. Exemptions have been taken in relation to the presentation of a cash flow statement and related party disclosures relating to group balances.
Name of the parent of the group
These financial statements are consolidated in the financial statements of Brightborough Group Limited.
The consolidated financial statements of Brightborough Group Limited may be obtained from the Registrar of Companies, Companies House, Crown Way, Cardiff, CF14 3UZ.
Going concern
The directors have considered the impact of the COVID-19 pandemic and detailed the effects and countermeasures taken in the Strategic Report. They have concluded that while there has been impact in the medium term, the actions taken mean that there should be no lasting effect on the results or position. Specifically, these are:
• The reduction of costs in line with revenues by placing staff into the CJRS as applicable and a continuing review of these and other costs.
• The securing of a CBILS facility to provide sufficient working capital and headroom to bridge the short-term requirements.
• The securing of new, profitable business.
After reviewing the company's forecasts and projections, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.
TEAM Precision Pipe Assemblies Limited
Notes to the Financial Statements for the Year Ended 30 September 2020
Critical accounting judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these 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 the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Judgements
The directors are required to make various judgements and estimations in respect of the fair value of stock held and the recoverability of trade debtors. |
Key sources of estimation uncertainty
No key sources of estimation uncertainty have been identified by management in preparing these financial statements other than those detailed in these accounting policies.
Turnover
Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts.
The company recognises revenue when: the amount of revenue can be reliably measured; it is probable that future economic benefits will flow to the entity; and specific criteria have been met for each of the company's activities.
Research and development
Research and development expenditure is written off in the year in which it is incurred.
Government grants
Government grants are recognised based on the accrual model and are measured at the fair value of the asset received or receivable. Grants are classified as relating either to revenue or to assets. Grants relating to revenue are recognised in income over the period in which the related costs are recognised. Grants relating to assets are recognised in income once the conditions for receipt have been met.
Foreign currency transactions and balances
Tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current corporation tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the company. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.
TEAM Precision Pipe Assemblies Limited
Notes to the Financial Statements for the Year Ended 30 September 2020
Tangible assets
Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
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Asset class |
Depreciation method and rate |
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Property improvements |
10-25 years straight line |
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Plant and machinery |
5 to 7 years straight line or sums of digits |
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Fixtures and fittings |
15 years |
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Office equipment |
4 years |
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Assets under construction |
Nil |
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Trade debtors
Trade debtors are amounts due from customers for merchandise sold in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. All trade debtors are repayable within one year and hence are included at the undiscounted cost of cash expected to be received. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the debtors.
Stocks
Stock and work in progress are valued at the lower of cost and net realisable value, after due regard for obsolete and slow moving stocks. Net realisable value is based on selling price less anticipated costs to completion and selling costs. Cost includes all direct costs and an appropriate proportion of fixed and variable overheads. Raw materials are purchase cost on a first-in, first-out basis. Work in progress and finished goods are the cost of direct material and labour plus attributable overheads on a normal level of activity.
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and all are repayable within one year and hence are included at the undiscounted amount of cash expected to be paid.
TEAM Precision Pipe Assemblies Limited
Notes to the Financial Statements for the Year Ended 30 September 2020
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease. Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.
Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.
Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Defined contribution pension obligation
The company operates a defined contribution pension scheme. Contributions are recognised in the profit and loss account in the period in which they become payable in accordance with the rules of the scheme.
TEAM Precision Pipe Assemblies Limited
Notes to the Financial Statements for the Year Ended 30 September 2020
Financial instruments
Classification
Recognition and measurement
Impairment
A non financial asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.
For financial assets carried at amortised cost, the amount of an impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.
For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.
Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.
TEAM Precision Pipe Assemblies Limited
Notes to the Financial Statements for the Year Ended 30 September 2020
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Revenue |
The analysis of the company's revenue for the year from continuing operations is as follows:
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2020 |
2019 |
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Sale of goods |
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The analysis of the company's turnover for the year by market is as follows:
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2020 |
2019 |
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UK |
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Europe |
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Rest of world |
- |
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Other operating income |
The analysis of the company's other operating income for the year is as follows:
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2020 |
2019 |
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Grants received |
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- |
Government grants have been recognised as income in the period in which the grant becomes receivable. During the year the company has benefited from the Government's Coronavirus Job Retention Scheme, and the amount recognised in relation to this in the financial statements is £479,000 (2019 - £nil).
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Operating (loss) / profit |
Arrived at after charging/(crediting):
|
2020 |
2019 |
|
|
Depreciation expense |
|
|
|
Amortisation expense |
- |
( |
|
Operating lease expense |
|
|
|
Foreign exchange (gains)/losses |
( |
|
|
Auditor's remuneration |
14 |
13 |
|
Interest payable and similar charges |
|
2020 |
2019 |
|
|
Interest on obligations under finance leases and hire purchase contracts |
|
|
|
Interest expense on other finance liabilities |
|
|
|
|
|
TEAM Precision Pipe Assemblies Limited
Notes to the Financial Statements for the Year Ended 30 September 2020
|
Staff costs |
The aggregate payroll costs were as follows:
|
2020 |
2019 |
|
|
Wages and salaries |
|
|
|
Social security costs |
|
|
|
Pension costs, defined contribution scheme |
|
|
|
|
|
The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:
|
2020 |
2019 |
|
|
Production |
|
|
|
Administration and support |
|
|
|
|
|
|
Taxation |
Tax charged/(credited) in the profit and loss account
|
2020 |
2019 |
|
|
Deferred taxation |
||
|
Arising from origination and reversal of timing differences |
( |
( |
The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2019 - lower than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
|
2020 |
2019 |
|
|
Loss before tax |
( |
( |
|
Corporation tax at standard rate |
( |
( |
|
Effect of income not taxable |
- |
( |
|
Effect of amortisation exempt from taxation |
- |
|
|
Effect of expense not deductible in determining taxable profit (tax loss) |
|
|
|
Chargeable gains/(losses) |
- |
( |
|
UK deferred tax expense (credit) relating to changes in tax rates or laws |
( |
|
|
Increase (decrease) from tax losses for which no deferred tax asset was recognised |
- |
|
|
Total tax credit |
( |
( |
TEAM Precision Pipe Assemblies Limited
Notes to the Financial Statements for the Year Ended 30 September 2020
Deferred tax
Deferred tax assets and liabilities
|
2020 |
Asset |
|
Accelerated capital allowances |
( |
|
Other timing differences |
|
|
|
|
2019 |
Liability |
|
Accelerated capital allowances |
|
|
Other timing differences |
( |
|
|
|
Tangible assets |
|
Land and buildings |
Furniture, fittings and equipment |
Assets under construction |
Total |
|
|
Cost or valuation |
||||
|
At 1 October 2019 |
|
|
|
|
|
Additions |
|
|
- |
|
|
Disposals |
- |
( |
- |
( |
|
Transfers |
- |
|
( |
- |
|
At 30 September 2020 |
|
|
- |
|
|
Depreciation |
||||
|
At 1 October 2019 |
|
|
- |
|
|
Charge for the year |
|
|
- |
|
|
At 30 September 2020 |
|
|
- |
|
|
Carrying amount |
||||
|
At 30 September 2020 |
|
|
- |
|
|
At 30 September 2019 |
|
|
|
|
Leased assets
Included within the net book value of tangible fixed assets is £1,075,494 (2019 - £915,080) in respect of assets held under hire purchase contracts. Depreciation for the year on these assets was £134,235 (2019 - £111,308).
Assets under construction
Assets under construction are not depreciated until the projects are complete and the assets brought into use.
TEAM Precision Pipe Assemblies Limited
Notes to the Financial Statements for the Year Ended 30 September 2020
|
Stocks |
|
2020 |
2019 |
|
|
Raw materials and consumables |
|
|
|
Work in progress |
|
|
|
Finished goods and goods for resale |
|
|
|
|
|
|
Debtors |
|
2020 |
2019 |
|
|
Trade debtors |
|
|
|
Other debtors |
|
- |
|
Prepayments |
|
|
|
|
|
|
Cash and cash equivalents |
|
2020 |
2019 |
|
|
Cash at bank |
|
|
|
Creditors |
|
2020 |
2019 |
||
|
Due within one year |
|||
|
Loans and borrowings |
|
|
|
|
Trade creditors |
|
|
|
|
Amounts due to related parties |
|
|
|
|
Social security and other taxes |
|
|
|
|
Other creditors |
|
|
|
|
Accruals and deferred income |
|
|
|
|
|
|
||
|
Due after one year |
|||
|
Loans and borrowings |
|
|
TEAM Precision Pipe Assemblies Limited
Notes to the Financial Statements for the Year Ended 30 September 2020
|
Loans and borrowings |
|
2020 |
2019 |
|
|
Current loans and borrowings |
||
|
Bank borrowings |
|
- |
|
Finance lease liabilities |
|
|
|
Factored debt |
406 |
1,313 |
|
|
|
|
|
2020 |
2019 |
|
|
Non-current loans and borrowings |
||
|
Bank borrowings |
|
- |
|
Finance lease liabilities |
|
|
|
|
|
|
The proceeds of factored debts are secured on trade debtors and secured by a fixed charge in relation to factored debt that has been registered over a proportion of the company's plant and machinery.
During the year the company secured a CBILS loan of £800,000. Under the rules of the scheme, the UK government will pay all associated fees as well as the first year's interest. Repayment is over 4 years in equal monthly instalments commencing January 2021. The loan is secured on the assets of the company and 80% of the advance is guaranteed by the British Business Bank.
The bank loans are secured over the Company's assets and by a guarantee from its immediate parent company Brightborough Capital Limited.
|
Pension and other schemes |
The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £
Contributions totalling £13,000 (2019 - £17,000) were payable to the scheme at the end of the year and are included within creditors.
|
Share capital |
Allotted, called up and fully paid shares
|
2020 |
2019 |
|||
|
No. 000 |
£ 000 |
No. 000 |
£ 000 |
|
|
|
|
100 |
|
100 |
TEAM Precision Pipe Assemblies Limited
Notes to the Financial Statements for the Year Ended 30 September 2020
|
Obligations under operating leases |
The total of future minimum lease payments is as follows:
|
2020 |
2019 |
|
|
Not later than one year |
|
|
|
Later than one year and not later than five years |
|
|
|
Later than five years |
|
|
|
|
|
At September 2020 the company had commitments outstanding of £Nil (2019 - £473,000) for purchases of raw materials. Raw materials were drawn down under a purchase contract as and when required.
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
|
Related party transactions |
Summary of transactions with key management
Remuneration
The company has taken advantage of the exemption from the requirement to disclose transactions with other group companies.
|
Parent and ultimate parent undertaking |
On 30 September 2019, as part of a group restructure, the ultimate parent company became Brightborough Group Limited (formerly MN339 Limited), a company registered in England and Wales. TEAM Precision Pipe Assemblies Limited remains a direct subsidiary of Brightborough Capital Limited.
Brightborough Group Limited is registered in England and Wales, and prepares consolidated financial statements, copies of which are available from the Registrar of Companies, Companies House, Crown Way,
Cardiff, CF14 3UZ.