Pipe Equipment Specialists Limited - Limited company accounts 23.2

REGISTERED NUMBER: 03028778 (England and Wales)

PIPE EQUIPMENT SPECIALISTS LIMITED

REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

Page

Company Information

1

Report of the Directors

2

to

3

Report of the Independent Auditors

4

to

7

Statement of Income and Retained Earnings

8

Balance Sheet

9

Notes to the Financial Statements

10

to

17

DIRECTORS:

P I Rowlands

S Law

D M Pye

REGISTERED OFFICE:

66a Dukesway

Teesside Industrial Esta

Thornaby Stockton On Tees

Cleveland

TS17 9LT

REGISTERED NUMBER:

03028778 (England and Wales)

AUDITORS:

UHY Calvert Smith LLP

Statutory Auditor

Chartered Accountants

Heritage House

Murton Way

Osbaldwick

York

North Yorkshire

YO19 5UW

BANKERS:

Handelsbanken

Ground Floor

Winder House

Kingfisher Way

Stockton-on-Tees

TS18 3EX

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 design and supply of a range of products associated with the installation of pipes, ducts and cables.

DIVIDENDS

The total distribution of dividends for the year ended 31 December 2022 will be £200,000.

RESEARCH AND DEVELOPMENT

The company continues to develop the range of existing products on an ongoing basis, as well as introducing new products to the range.

FUTURE DEVELOPMENTS

The company has a future strategy of organic growth.

DIRECTORS

P I Rowlands has held office during the whole of the period from 1 January 2022 to the date of this report.

Other changes in directors holding office are as follows:

D J Lyes - resigned 12 August 2022

S Law - appointed 13 April 2022

D M Pye was appointed as a director after 31 December 2022 but prior to the date of this report.

FINANCIAL INSTRUMENTS

As the company is part of the Indutrade Group, all cash flow issues are dealt with by the parent company at group level.

STRATEGIC REPORT

The company is a member of an ineligible group so is not permitted to prepare accounts under the small companies regime but has taken advantage of the exemption available under section 414B of the Companies Act 2006 from the requirement to prepare a Strategic Report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing 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, UHY Calvert Smith LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

D M Pye - Director

29 September 2023

Opinion

We have audited the financial statements of Pipe Equipment Specialists Limited (the 'company') for the year ended 31 December 2022 which comprise the Statement of Income and Retained Earnings, Balance Sheet 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 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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Report of the Directors has 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 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 pages two and 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:

- we identified the laws and regulations applicable to the company through discussions with management and from our commercial knowledge and experience of the sector; and

- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation, employment, and health and safety legislation.

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

- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; 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 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;

- reviewing legal and professional expenses for evidence of potential litigation and claim; and

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

Because of 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. 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.

Hayden Priest BEng BFP FCA (Senior Statutory Auditor)

for and on behalf of UHY Calvert Smith LLP

Statutory Auditor

Chartered Accountants

Heritage House

Murton Way

Osbaldwick

York

North Yorkshire

YO19 5UW

29 September 2023

TURNOVER

3

1,280,690

1,162,016

Cost of sales

583,754

541,221

GROSS PROFIT

696,936

620,795

Administrative expenses

450,672

405,690

246,264

215,105

Other operating income

7,200

4,800

OPERATING PROFIT

5

253,464

219,905

Interest payable and similar expenses

6

1,861

690

PROFIT BEFORE TAXATION

251,603

219,215

Tax on profit

7

49,022

42,655

PROFIT FOR THE FINANCIAL YEAR

202,581

176,560

Retained earnings at beginning of year

363,735

387,175

Dividends

8

(200,000

)

(200,000

)

RETAINED EARNINGS AT END OF YEAR

366,316

363,735

FIXED ASSETS

Intangible assets

9

-

4,869

Tangible assets

10

26,164

12,846

26,164

17,715

CURRENT ASSETS

Stocks

11

276,860

256,236

Debtors

12

254,631

225,222

Cash at bank and in hand

144,216

204,305

675,707

685,763

CREDITORS

Amounts falling due within one year

13

276,769

282,959

NET CURRENT ASSETS

398,938

402,804

TOTAL ASSETS LESS CURRENT LIABILITIES

425,102

420,519

PROVISIONS FOR LIABILITIES

16

2,002

-

NET ASSETS

423,100

420,519

CAPITAL AND RESERVES

Called up share capital

17

25,000

25,000

Capital redemption reserve

18

31,784

31,784

Retained earnings

18

366,316

363,735

SHAREHOLDERS' FUNDS

423,100

420,519

The financial statements were approved by the Board of Directors and authorised for issue on 29 September 2023 and were signed on its behalf by:

D M Pye - Director

1.	STATUTORY INFORMATION

Pipe Equipment Specialists 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.

Financial Reporting Standard 102 - reduced disclosure exemptions

- the requirement to prepare a statement of cashflows as required by paragraph 3.17(d);

- the requirement to present certain financial instrument disclosures, as required by sections 11 and 12;

- the requirement to disclose the key management personnel compensation in total as required by paragraph

33.7; and

- the requirement to disclose related party transactions as provided by paragraph 33.1A.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and

assumptions that affect the application of the accounting policies and the reported amounts of assets and

liabilities, revenue and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are continually evaluated and are based on historical experience and

other factors, including expectations of future events that are reasonable under the circumstances. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

The directors do not believe there are any estimates or assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities.

Turnover

Turnover is recognised at the fair value of consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2001, was amortised evenly over its estimated useful life of three years. It is now fully amortised.

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 was amortised evenly over its estimated useful life of three years. It is now fully amortisted.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Improvements to property

-

Over the period of the lease

Plant and machinery

-

15 - 33% on cost

Fixtures and fittings

-

50% on cost and 33% on cost

Equipment for hire

-

15 - 33% on cost

Tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses.

Stocks

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

Stocks are valued at the lower of cost and net realisable value, using the FIFO method. Due allowance is made for obsolete and slow moving items.

Financial instruments

The company adopts Sections 11 and 12 of FRS 102 in respect of financial instruments.

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.

Foreign currencies

Transactions in foreign currencies are translated into sterling at a standard exchange rate throughout the year. Exchange differences are taken into account in arriving at the operating result and report the difference between the standard rates and the actual rate. Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date.

Hire purchase and leasing commitments

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

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 profit or loss in the period to which they relate.

Related party transactions

The company discloses transactions with related parties which are not wholly owned within the same group.

Where appropriate, transactions of a similar nature are aggregated unless, in the opinion of the directors,

separate disclosure is necessary to understand the effect of the transactions on the company's financial

statements.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2022

2021

£

£

United Kingdom

787,664

772,578

EC sales

237,992

217,677

Non EC sales

255,034

171,761

1,280,690

1,162,016

4.	EMPLOYEES AND DIRECTORS

2022

2021

£

£

Wages and salaries

204,093

189,477

Social security costs

17,993

16,626

Other pension costs

4,016

3,651

226,102

209,754

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

2022

2021

Staff

7

8

2022

2021

£

£

Directors' remuneration

42,889

-

Directors' pension contributions to money purchase schemes

881

-

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

1

-

5.	OPERATING PROFIT

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

2022

2021

£

£

Other operating leases

35,037

35,251

Depreciation - owned assets

2,727

8,872

Profit on disposal of fixed assets

(1,700

)

-

Computer software amortisation

4,869

6,989

Auditors' remuneration

4,775

8,690

Auditors' remuneration for non audit work

2,475

-

Foreign exchange differences

(2,969

)

9,447

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

2022

2021

£

£

Bank interest

1,861

690

7.

TAXATION

Analysis of the tax charge

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

2022

2021

£

£

Current tax:

UK corporation tax

45,381

44,294

Deferred tax

3,641

(1,639

)

Tax on profit

49,022

42,655

UK corporation tax has been charged at 19% (2021 - 19%).

Reconciliation of total tax charge included in profit and loss

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

2022

2021

£

£

Profit before tax

251,603

219,215

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

47,805

41,651

Effects of:

Expenses not deductible for tax purposes

61

290

Depreciation in excess of capital allowances

1,734

714

provided

Impact of change in rate applied for measurement of deferred tax

(578

)

-

Total tax charge

49,022

42,655

8.

DIVIDENDS

2022

2021

£

£

Ordinary shares of £1 each

Final

200,000

200,000

9.	INTANGIBLE FIXED ASSETS

Computer

Goodwill

software

Totals

£

£

£

COST

At 1 January 2022

and 31 December 2022

15,000

21,177

36,177

AMORTISATION

At 1 January 2022

15,000

16,308

31,308

Amortisation for year

-

4,869

4,869

At 31 December 2022

15,000

21,177

36,177

NET BOOK VALUE

At 31 December 2022

-

-

-

At 31 December 2021

-

4,869

4,869

10.	TANGIBLE FIXED ASSETS

Improvements

Fixtures

to

Plant and

and

Equipment

property

machinery

fittings

for hire

Totals

£

£

£

£

£

COST

At 1 January 2022

34,680

33,118

40,841

40,468

149,107

Additions

-

14,995

1,050

-

16,045

Disposals

-

(4,575

)

-

-

(4,575

)

At 31 December 2022

34,680

43,538

41,891

40,468

160,577

DEPRECIATION

At 1 January 2022

21,953

33,015

40,841

40,452

136,261

Charge for year

2,281

401

29

16

2,727

Eliminated on disposal

-

(4,575

)

-

-

(4,575

)

At 31 December 2022

24,234

28,841

40,870

40,468

134,413

NET BOOK VALUE

At 31 December 2022

10,446

14,697

1,021

-

26,164

At 31 December 2021

12,727

103

-

16

12,846

11.

STOCKS

2022

2021

£

£

Goods held for resale

276,860

256,236

12.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2022

2021

£

£

Trade debtors

209,485

159,607

Amounts owed by group undertakings

833

1,696

VAT

801

33,788

Deferred tax asset

-

1,639

Prepayments and accrued income

43,512

28,492

254,631

225,222

13.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2022

2021

£

£

Bank loans and overdrafts (see note 14)

62,651

132,967

Trade creditors

128,960

96,596

Amounts owed to group undertakings

8,526

9,555

Tax

19,178

21,831

Other creditors

2,025

1,774

Accruals and deferred income

55,429

20,236

276,769

282,959

14.

LOANS

An analysis of the maturity of loans is given below:

2022

2021

£

£

Amounts falling due within one year or on demand:

Bank overdrafts

62,651

132,967

15.	LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:

2022

2021

£

£

Within one year

35,000

35,000

Between one and five years

140,000

140,000

In more than five years

110,833

145,833

285,833

320,833

Operating lease payments recognised as an expense during the period amounted to £35,037.

16.	PROVISIONS FOR LIABILITIES

2022

£

Deferred tax

2,002

Deferred

tax

£

Balance at 1 January 2022

(1,639

)

Provided during year

3,641

Movement in the year

Balance at 31 December 2022

2,002