REGISTERED NUMBER: |
PRV ENGINEERING LIMITED |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
REGISTERED NUMBER: |
PRV ENGINEERING LIMITED |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
PRV ENGINEERING LIMITED (REGISTERED NUMBER: 02075421) |
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
Page |
Company Information | 1 |
Strategic Report | 2 | to | 3 |
Report of the Directors | 4 | to | 5 |
Report of the Independent Auditors | 6 | to | 9 |
Income Statement | 10 |
Other Comprehensive Income | 11 |
Balance Sheet | 12 |
Statement of Changes in Equity | 13 |
Notes to the Financial Statements | 14 | to | 25 |
PRV ENGINEERING LIMITED |
COMPANY INFORMATION |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants and Statutory Auditor |
Swansea, United Kingdom |
AUDITORS OFFICE: |
Swansea Enterprise Park |
Swansea |
SA7 9FG |
PRV ENGINEERING LIMITED (REGISTERED NUMBER: 02075421) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
The directors present their strategic report for the year ended 31 December 2022. |
REVIEW OF BUSINESS |
The company's trading results for the financial year are shown in the financial statements. |
FY22 continued to be a success for the company owing to our stable customer base, the provision of excellent customer service, on time delivery and high quality products. |
The company enjoys a number of competitive advantages due to its experience and expertise in multiple disciplines such as General and CNC Machining, 5 Axis Machining, Hydro-Abrasive Waterjet Cutting, Deep Hole Drilling, Welding and Fabrication, Spray Painting, Powder Coating and Shot Blasting. We also have large format milling machines which enable us to machine on a 2.5 x 2m bed which puts us in a very strong position with our competitors. |
Our business strategy is to continue to develop our relationships with both existing and new customers and provide a comprehensive one stop service, investing in new machinery and employing extra staff when required. |
KEY PERFORMANCE INDICATORS |
The directors were pleased with the performance of the business during FY22. |
The key performance indicators are summarised below. |
2022 | 2021 |
£'000 | £'000 |
Turnover | 4,982 | 7,044 |
Gross Profit | 2,639 | 3,586 |
EBITDA | 1,490 | 2,338 |
Operating Profit | 1,186 | 2,041 |
PRV ENGINEERING LIMITED (REGISTERED NUMBER: 02075421) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
PRINCIPAL RISKS AND UNCERTAINTIES |
The key business risks are as follows: |
Price Risk |
The Purchasing Director continually monitors movement in material prices on a regular basis but does not consider it to be beneficial to undertake any formal hedging arrangements. |
Credit Risk |
The company has implemented policies that require appropriate credit checks to be made on both existing and potential customers before sales are made. The amount of exposure to any individual counter party is continually monitored in line with credit control procedures. Contracts are in place with the main blue chip customers of the business. |
Competition |
Whilst the market remains competitive the company has a successful track record for achieving growth whilst maintaining a strong market position. |
Liquidity and Interest Rate Risk |
The cash position of the company remains strong. The company mitigates against any fluctuations in market conditions by fixing the rate of interest charged on any debt instruments issued. |
ON BEHALF OF THE BOARD: |
PRV ENGINEERING LIMITED (REGISTERED NUMBER: 02075421) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
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 the manufacture and engineering of metal based components. |
DIVIDENDS |
The total distribution of dividends for the year ended 31 December 2022 will be £ |
DIRECTORS |
The directors shown below have 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: |
GOING CONCERN |
The financial statements have been prepared on a going concern basis which assumes that the company will continue in operational existence for the foreseeable future. |
The directors have reviewed the balance sheet, the likely future cash flows of the business and has considered the facilities that are in place at the date of signing the report. The directors anticipate that trading will remain competitive in the forthcoming financial year. |
At the date of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for foreseeable future. |
DISCLOSURE IN THE STRATEGIC REPORT |
Included in the company's strategic report is a review of the business and a description of the principal risks and uncertainties facing the company. |
PRV ENGINEERING LIMITED (REGISTERED NUMBER: 02075421) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 |
On 1 December 2022 as a result of a merger, Gerald Thomas resigned as auditors in accordance with Section 516 of the Companies Act 2006 and re-engaged its services as MHA. |
MHA, have indicated their willingness to continue in office as the company's auditors and a resolution for their reappointment will be proposed at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
PRV ENGINEERING LIMITED |
Opinion |
We have audited the financial statements of PRV Engineering Limited (the 'company') for the year ended 31 December 2022 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its profit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
PRV ENGINEERING LIMITED |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page five, 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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
PRV ENGINEERING LIMITED |
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: |
Detecting Irregularities |
The objectives of our audit in relation to fraud are as follows: |
- to identify and assess the risks of material misstatement of the financial statements due to fraud; |
- to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; |
- and to respond appropriately to fraud or suspected fraud identified during the audit. |
Auditor's approach to assessing the risks of material mis-statement due to irregularities, including fraud |
We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant frameworks which are directly relevant to specific assertions in the financial statements are those that relate ot the reporting framework (FRS 102 and the Companies Act 2006) and the relevant tax compliance regulations in the UK. |
We assessed the risks of material misstatement in respect of fraud and considered the extent to which non-compliance with laws and regulations might have material effect on the financial statements. |
Audit procedures designed to respond to the risks of non-compliance with laws and regulations |
Based on the results of our risk assessment, we designed our audit procedures to identify non-compliance with such laws and regulations identified above. We made enquiries of senior management to understand how the company is complying with those frameworks. Audit procedures performed by the engagement team also included a review of the financial statements disclosures to underlying supporting documentation. |
Audit procedures designed to respond to the risk of fraud |
We assessed the susceptibility of the company's financial statements to material misstatement, including how fraud might occur, by means of developing an understanding the company's controls and discussing with management the perceived risks and where they considered there was susceptibility to fraud. |
Based on the results of our risk assessment we designed our audit procedures to identify and to address material misstatement in relation to fraud. |
As well as adopting an attitude of professional scepticism, we have obtained information for use in identifying the risk of fraud when performing risk assessment procedures and performed the following procedures in light of the of the risk of fraud: |
- Discussion amongst the audit engagement team regarding the susceptibility of the client to fraud; |
- Consideration of the risk of fraud when documenting and testing internal controls; |
- Enquiring of management how they: assess the risk of fraud; identify and respond to the risk of fraud; |
- Enquiring of management and the directors whether they have any knowledge of actual or suspected fraud; |
- Remaining alert to the inconsistent or contradictory information and obtaining evidence to support information provided. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
PRV ENGINEERING LIMITED |
Management override of controls |
We considered the risk of fraud through management override and, in response, we incorporated testing of manual journal entries into our audit approach. The audit engagement team performed journal entry testing using a risk-based approach and evaluated whether there was evidence of bias, with focus on any journals indicating large or unusual transactions, non-routine journals and journals processed for before and after the accounting reference date. |
Considerations around likelihood of detection |
However owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material mis-statements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not resoluble for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations. |
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. |
for and on behalf of |
Chartered Accountants and Statutory Auditor |
Swansea, United Kingdom |
PRV ENGINEERING LIMITED (REGISTERED NUMBER: 02075421) |
INCOME STATEMENT |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
2022 | 2021 |
Notes | £ | £ |
TURNOVER | 3 |
Cost of sales |
GROSS PROFIT |
Administrative expenses |
1,159,725 | 2,012,555 |
Other operating income |
OPERATING PROFIT | 5 |
Interest receivable and similar income |
1,192,849 | 2,040,785 |
Interest payable and similar expenses | 6 |
PROFIT BEFORE TAXATION |
Tax on profit | 7 |
PROFIT FOR THE FINANCIAL YEAR |
PRV ENGINEERING LIMITED (REGISTERED NUMBER: 02075421) |
OTHER COMPREHENSIVE INCOME |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
2022 | 2021 |
Notes | £ | £ |
PROFIT FOR THE YEAR |
OTHER COMPREHENSIVE INCOME |
Transfer from revaluation reserve | ( |
) | ( |
) |
Transfer to retained earnings |
Income tax relating to components of other comprehensive income |
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
PRV ENGINEERING LIMITED (REGISTERED NUMBER: 02075421) |
BALANCE SHEET |
31 DECEMBER 2022 |
2022 | 2021 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 9 |
Tangible assets | 10 |
CURRENT ASSETS |
Stocks | 11 |
Debtors | 12 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 13 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
14 |
( |
) |
( |
) |
PROVISIONS FOR LIABILITIES | 18 | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 19 |
Revaluation reserve | 20 |
Retained earnings | 20 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
PRV ENGINEERING LIMITED (REGISTERED NUMBER: 02075421) |
STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
Called up |
share | Retained | Revaluation | Total |
capital | earnings | reserve | equity |
£ | £ | £ | £ |
Balance at 1 January 2021 |
Changes in equity |
Profit for the year | - | 1,572,368 | - | 1,572,368 |
Other comprehensive income | - | 5,124 | ( |
) | - |
Total comprehensive income | - | ( |
) |
Dividends | - | ( |
) | - | ( |
) |
Balance at 31 December 2021 |
Changes in equity |
Profit for the year | - | 941,049 | - | 941,049 |
Other comprehensive income | - | 5,124 | ( |
) | - |
Total comprehensive income | - | ( |
) |
Dividends | - | ( |
) | - | ( |
) |
Balance at 31 December 2022 |
PRV ENGINEERING LIMITED (REGISTERED NUMBER: 02075421) |
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
1. | STATUTORY INFORMATION |
PRV Engineering Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
Monetary amounts in these financial statements are rounded to the nearest £. |
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. modified to include the revaluation of leasehold properties and certain financial instruments at fair value. |
The principal accounting policies applied in the preparation of these financial statements are set out below. |
Going concern |
The financial statements have been prepared on a going concern basis which assumes that the company will continue in operational existence for the foreseeable future. |
The directors have reviewed the balance sheet, the likely future cash flows of the business and has considered the facilities that are in place at the date of signing the report. The directors anticipate that trading will remain competitive in the forthcoming financial year. |
At the date of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for foreseeable future. |
Accordingly, they continue to adopt the going concern basis in preparing the financial statements. |
Financial Reporting Standard 102 - reduced disclosure exemptions |
The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
• | the requirements of Section 7 Statement of Cash Flows. |
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 amount 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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods. |
There are no key sources of estimation uncertainty that have a significant effect on the amounts recognised in the financial statements. |
PRV ENGINEERING LIMITED (REGISTERED NUMBER: 02075421) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
2. | ACCOUNTING POLICIES - continued |
Turnover |
Turnover is recognised at the fair value of the 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 recognition |
(1) Engineering Product Turnover |
The revenue derived from the sale of manufactured engineering products is recognised on despatch of the goods to the customer. |
(2) Fabrication Services Turnover |
The revenue derived from fabrication services is recognised to reflect the stage of completion of work carried out. |
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. |
Tangible fixed assets |
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses. |
Depreciation is recognised so as to write off the cost or valuation of assets less their residual value over their useful lives on the following bases: |
Long Leasehold Property | - | Straight line over 50 years |
Plant and machinery | - | 10% Straight line |
Motor vehicles | - | 25% Straight line |
Office equipment | - | 15% Straight line |
Government grants |
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received. |
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability. |
Stocks |
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost compromises direct material and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their current location and condition. |
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss. |
PRV ENGINEERING LIMITED (REGISTERED NUMBER: 02075421) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
The company has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS 102 to all of its financial instruments. |
Financial assets and financial liabilities are recognised when the company becomes a party to the contractual provisions of the instrument. |
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. |
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously. |
Financial assets and liabilities |
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a finance transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. |
Debt instruments that are classified as payable or receivable within one year are measured at the undiscounted amount of the cash or other consideration expected to be paid or received, net of impairment. |
Basic financial assets |
Basic financial assets, which include trade debtors and cash and bank balances, are initially measured at transaction price, (including transaction costs) and are subsequently carried at amortised cost using the effective interest method, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised. |
Other financial assets |
Other financial assets , including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at Fair value, which is normally the transaction price. Such assets are subsequently carried at far value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are no publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment. |
Impairment of financial assets |
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date. |
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in profit or loss. |
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss. |
PRV ENGINEERING LIMITED (REGISTERED NUMBER: 02075421) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
2. | ACCOUNTING POLICIES - continued |
Derecognition of financial assets |
Financial assets are derecognised when and only when the contractual rights to the cash flows from the financial asset expire or are settled, the company transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or the company, despite having retained some significant risks and rewards of ownership, has transferred control of the asset to another party and the other party has the practical ability to sell the asset in its entirety to an unrelated third party and is able to exercise that ability unilaterally and without needing to impose additional restrictions on the transfer. |
Basic financial liabilities |
Basic financial liabilities, including trade creditors, bank loans and loans from fellow group companies are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised. |
Debt instruments are subsequently carried at amortised costs, using the effective interest rate method. |
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method. |
Other financial liabilities |
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge. |
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy. |
Derecognition of financial liabilities |
Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires. |
Cash at bank and in hand |
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities. |
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 |
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. |
PRV ENGINEERING LIMITED (REGISTERED NUMBER: 02075421) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
2. | ACCOUNTING POLICIES - continued |
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 |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
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. |
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases. |
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the profit and loss accounts so as to produce a constant periodic rate of interest on the remaining balance of the liability. |
Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. The assets of the scheme are held separately from those of the company in an independently administered fund |
Employee benefits |
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets. |
The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received. |
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits. |
Equity instruments |
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company. |
PRV ENGINEERING LIMITED (REGISTERED NUMBER: 02075421) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
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 |
Europe |
4. | EMPLOYEES AND DIRECTORS |
2022 | 2021 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
2022 | 2021 |
Employees (including directors) |
2022 | 2021 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
Information regarding the highest paid director is as follows: |
2022 | 2021 |
£ | £ |
Emoluments etc |
5. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
2022 | 2021 |
£ | £ |
Hire of plant and machinery |
Other operating leases |
Depreciation - owned assets |
Depreciation - assets on hire purchase contracts |
Profit on disposal of fixed assets | ( |
) |
Auditors' remuneration |
Foreign exchange differences |
Government grants | ( |
) | ( |
) |
PRV ENGINEERING LIMITED (REGISTERED NUMBER: 02075421) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2022 | 2021 |
£ | £ |
Bank loan interest |
Invoice discounting interest |
Other interest |
Hire purchase |
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 |
Corporation tax - prior year | 1,606 | 28,618 |
Total current tax |
Deferred tax | ( |
) |
Tax on profit |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
2022 | 2021 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of |
Effects of: |
Expenses not deductible for tax purposes |
Capital allowances in excess of depreciation | ( |
) | ( |
) |
Adjustments to tax charge in respect of previous periods |
Depreciation non-qualifying assets | 3,837 | 3,829 |
Change in tax rate | - | 18,987 |
Total tax charge | 211,071 | 421,120 |
PRV ENGINEERING LIMITED (REGISTERED NUMBER: 02075421) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
7. | TAXATION - continued |
Tax effects relating to effects of other comprehensive income |
2022 |
Gross | Tax | Net |
£ | £ | £ |
Transfer from revaluation reserve | ( |
) | - | (5,124 | ) |
Transfer to retained earnings | - | 5,124 |
- | - | - |
2021 |
Gross | Tax | Net |
£ | £ | £ |
Transfer from revaluation reserve | ( |
) | - | (5,124 | ) |
Transfer to retained earnings | - | 5,124 |
- | - | - |
8. | DIVIDENDS |
Ordinary dividends were paid amounting to £316,292 (2021: £306,508). The directors do not recommend payment of a further dividend. |
9. | INTANGIBLE FIXED ASSETS |
Goodwill |
£ |
COST |
At 1 January 2022 |
and 31 December 2022 |
AMORTISATION |
At 1 January 2022 |
and 31 December 2022 |
NET BOOK VALUE |
At 31 December 2022 |
At 31 December 2021 |
PRV ENGINEERING LIMITED (REGISTERED NUMBER: 02075421) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
10. | TANGIBLE FIXED ASSETS |
Long | Plant and | Motor | Office |
leasehold | machinery | vehicles | equipment | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 January 2022 |
and 31 December 2022 |
DEPRECIATION |
At 1 January 2022 |
Charge for year |
At 31 December 2022 |
NET BOOK VALUE |
At 31 December 2022 |
At 31 December 2021 |
Land and buildings with a carrying amount of £1,000,000 were revalued at 25 June 2019 by Hutchings and Thomas Chartered Surveyors for the Company's Bankers HSBC. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties. |
If revalued assets were stated on an historical cost basis rather than at fair value, the total amounts included would have been as follows : |
2022 | 2021 |
£ | £ |
Cost | 549,087 | 549,087 |
Accumulated depreciation | (174,283 | ) | (155,513 | ) |
Carrying value | 374,804 | 393,574 |
The net book value of tangible fixed assets includes £ 717,507 (2021 - £ 842,613 ) in respect of assets held under hire purchase contracts. |
11. | STOCKS |
2022 | 2021 |
£ | £ |
Raw materials |
Work In Progress |
PRV ENGINEERING LIMITED (REGISTERED NUMBER: 02075421) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
12. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2022 | 2021 |
£ | £ |
Trade debtors |
Amounts owed by group undertakings |
Other debtors |
Directors' current accounts | - | 449,159 |
Prepayments and accrued income |
13. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2022 | 2021 |
£ | £ |
Bank loans and overdrafts (see note 15) |
Hire purchase contracts (see note 16) |
Trade creditors |
Corporation tax |
Social security and other taxes |
VAT | 112,089 | 165,025 |
Other creditors |
Directors' loan accounts | 64,671 | 64,671 |
Accruals and deferred income |
Deferred government grants |
14. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2022 | 2021 |
£ | £ |
Bank loans (see note 15) |
Hire purchase contracts (see note 16) |
Deferred government grants |
15. | LOANS |
An analysis of the maturity of loans is given below: |
2022 | 2021 |
£ | £ |
Amounts falling due within one year or on demand: |
Bank loans |
Amounts falling due between one and two years: |
Bank loans - 1-2 years |
PRV ENGINEERING LIMITED (REGISTERED NUMBER: 02075421) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
16. | LEASING AGREEMENTS |
Minimum lease payments under hire purchase fall due as follows: |
2022 | 2021 |
£ | £ |
Net obligations repayable: |
Within one year |
Between one and five years |
17. | SECURED DEBTS |
The following secured debts are included within creditors: |
2022 | 2021 |
£ | £ |
Bank loans |
Hire purchase contracts | 387,715 | 564,139 |
Bank loans are secured by fixed and floating charges over all the assets and undertakings of PRV Engineering Limited, a charge over contract monies, a debenture and a cross company guarantee from Transit Engineering Limited. |
Obligations under hire purchase contracts are secured by the underlying assets. |
18. | PROVISIONS FOR LIABILITIES |
2022 | 2021 |
£ | £ |
Deferred tax | 128,507 | 188,658 |
Deferred |
tax |
£ |
Balance at 1 January 2022 |
Credit to Income Statement during year | ( |
) |
Balance at 31 December 2022 |
19. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2022 | 2021 |
value: | £ | £ |
Ordinary | £1 | 2 | 2 |
PRV ENGINEERING LIMITED (REGISTERED NUMBER: 02075421) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2022 |
20. | RESERVES |
Retained | Revaluation |
earnings | reserve | Totals |
£ | £ | £ |
At 1 January 2022 | 5,930,360 |
Profit for the year |
Dividends | ( |
) | ( |
) |
Revaluation in year | 5,124 | (5,124 | ) | - |
At 31 December 2022 | 6,555,117 |
21. | PENSION COMMITMENTS |
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. |
The pension cost charge £73,841 (2021 - £69,597) represents contributions payable by the company to the fund. |
22. | CONTINGENT LIABILITIES |
The company guarantees the bank facility of Transit Engineering Limited (its holding company) by means of an unlimited cross guarantee. |
23. | DIRECTORS' ADVANCES, CREDITS AND GUARANTEES |
At 31 December 2022, the company owed the director Mr S K Jones £64,671 (2021 - £64,671). Interest is charged on the loan at a rate of 11.75% per annum. The loan is repayable on demand. |
24. | RELATED PARTY DISCLOSURES |
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
25. | ULTIMATE CONTROLLING PARTY |
Transit Engineering Limited is the parent company. The registered office address of Transit Engineering Limited is Pegasus House, Polo Grounds, New Inn, Pontypool, NP4 0TW. |
The ultimate controlling party is S K Jones. |