Company registration number 08506274 (England and Wales)
ARM PIPETEK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2024
ARM PIPETEK LIMITED
COMPANY INFORMATION
Directors
Mr D Watson
Mr S M Wood
Mr S Burke
Company number
08506274
Registered office
Unit 8
Belmont Industrial Estate
Durham
DH1 1TN
Auditor
Mullen Stoker Limited
Mullen Stoker House
Mandale Business Park
Belmont Industrial Estate
Durham
DH1 1TH
Business address
Unit 8
Belmont Industrial Estate
Durham
DH1 1TN
ARM PIPETEK LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 24
ARM PIPETEK LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 30 APRIL 2024
- 1 -

The directors present the strategic report for the Period ended 30 April 2024.

Principal activities

The principal activity of the company continued to be that of trenchless technology solutions.

Review of the business

Turnover continues to increase due to further tendering success and repeat business.

Whilst increasing turnover is critical to growth, an analysis of different work streams has enabled less profitable work to be replaced with higher margin activities.

This is reflected in a significant increase in profit before tax.

We continue to attract blue chip clients, either as subcontractor or increasingly as main contractor.

A major review of capital expenditure has identified ongoing requirements to be able to maintain revenue growth.

Detailed cash flow projections are continually reviewed and assessed to maintain an adequate level of working capital.

Objectives and strategy

The main strategy is to continue to foster good customer service and working practices, whilst growing further our customer and area base.

This is supported by constant cost analysis and a comprehensive training programme for staff.

Key performance indicators

                     2024         2023

Sales                    £11,971,197        £10,971,143

Gross Profit                 26.88%         26.77%

Pre-tax profit                £ 819,966        £ 379,766

 

The key performance indicators are those that communicate the financial performance of the company.

These include, departmental profit analysis, maintaining working capital requirements and evaluating investment and payback in capital expenditure.

Principal risks and uncertainties

The company is exposed to operational, financial and commercial risks and it is the responsibility of the directors to assess these risks and ensure appropriate controls are in place.

The directors consider the principal risks, and mitigating controls are as follows.

Successful tendering

Achieved by choosing the right opportunities and being fully aware of client needs. Include the involvement of all key staff. Maintain up to date cost base and forecasted market movements

 

Competitors

Staying ahead of competitors by constant review of cost base, improving procedures and maintaining first class customer service.

 

Funding

Cash flow is continually monitored, and the company has a significant line of credit for capital expenditure.

 

Staff retention

This is achieved by providing a safe and engaging environment, with full training programme for all staff where appropriate.

 

ARM PIPETEK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 2 -
Laws and regulations

The company complies with the following laws and regulations in addition to standard company regulations:

 

On behalf of the board

Mr S M Wood
Director
31 January 2025
ARM PIPETEK LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 30 APRIL 2024
- 3 -

The directors present their annual report and financial statements for the Period ended 30 April 2024.

Results and dividends

The results for the Period are set out on page 8.

Ordinary dividends were paid amounting to £225,000. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the Period and up to the date of signature of the financial statements were as follows:

Mr D Watson
Mr S M Wood
Mr S Burke
Auditor

The auditor, Mullen Stoker Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Mr S M Wood
Director
31 January 2025
ARM PIPETEK LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 30 APRIL 2024
- 4 -

The directors are responsible for preparing the annual 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:

 

 

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.

ARM PIPETEK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ARM PIPETEK LIMITED
- 5 -
Opinion

We have audited the financial statements of ARM Pipetek Limited (the 'company') for the Period ended 30 April 2024 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including 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:

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

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 other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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 our audit:

ARM PIPETEK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ARM PIPETEK LIMITED (CONTINUED)
- 6 -
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 directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

- Enquiry of management, those charged with governance and the entity’s solicitors around actual and potential litigation and claims.

- Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.

- Reviewing minutes of meetings of those charged with governance.

- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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.

ARM PIPETEK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ARM PIPETEK LIMITED (CONTINUED)
- 7 -
Mr Neil Mullen
Senior Statutory Auditor
For and on behalf of Mullen Stoker Limited
31 January 2025
Chartered Accountants
Statutory Auditor
Mullen Stoker House
Mandale Business Park
Belmont Industrial Estate
Durham
DH1 1TH
ARM PIPETEK LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 30 APRIL 2024
- 8 -
Period
Year
ended
ended
30 April
29 April
2024
2023
Notes
£
£
Turnover
3
11,971,197
10,971,143
Cost of sales
(8,753,549)
(8,034,262)
Gross profit
3,217,648
2,936,881
Administrative expenses
(2,320,352)
(2,484,483)
Operating profit
4
897,296
452,398
Interest payable and similar expenses
7
(77,330)
(78,960)
Amounts written off investments
8
-
6,328
Profit before taxation
819,966
379,766
Tax on profit
9
(211,612)
(85,826)
Profit for the financial Period
608,354
293,940

The profit and loss account has been prepared on the basis that all operations are continuing operations.

ARM PIPETEK LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 APRIL 2024
- 9 -
Period
Year
ended
ended
30 April
29 April
2024
2023
£
£
Profit for the Period
608,354
293,940
Other comprehensive income
-
-
Total comprehensive income for the Period
608,354
293,940
ARM PIPETEK LIMITED
BALANCE SHEET
AS AT
30 APRIL 2024
30 April 2024
- 10 -
30 April 2024
29 April 2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
1,500,196
1,609,138
Current assets
Stocks
12
17,577
42,000
Debtors
13
1,954,732
1,570,167
Cash at bank and in hand
1,081,904
397,852
3,054,213
2,010,019
Creditors: amounts falling due within one year
14
(2,737,155)
(2,082,032)
Net current assets/(liabilities)
317,058
(72,013)
Total assets less current liabilities
1,817,254
1,537,125
Creditors: amounts falling due after more than one year
15
(556,508)
(830,823)
Provisions for liabilities
Deferred tax liability
18
360,247
189,157
(360,247)
(189,157)
Net assets
900,499
517,145
Capital and reserves
Called up share capital
20
152
152
Profit and loss reserves
900,347
516,993
Total equity
900,499
517,145

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 31 January 2025 and are signed on its behalf by:
Mr S M Wood
Director
Company registration number 08506274 (England and Wales)
ARM PIPETEK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 APRIL 2024
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 30 April 2022
152
493,053
493,205
Year ended 29 April 2023:
Profit and total comprehensive income
-
293,940
293,940
Dividends
10
-
(270,000)
(270,000)
Balance at 29 April 2023
152
516,993
517,145
Period ended 30 April 2024:
Profit and total comprehensive income
-
608,354
608,354
Dividends
10
-
(225,000)
(225,000)
Balance at 30 April 2024
152
900,347
900,499
ARM PIPETEK LIMITED
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 APRIL 2024
- 12 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
24
1,423,726
597,166
Interest paid
(77,330)
(78,960)
Income taxes refunded
10,755
1
Net cash inflow from operating activities
1,357,151
518,207
Investing activities
Purchase of tangible fixed assets
(190,103)
(514,211)
Proceeds from disposal of tangible fixed assets
19,000
35,419
Repayment of loans
(529)
4,287
Net cash used in investing activities
(171,632)
(474,505)
Financing activities
Repayment of bank loans
(72,000)
(72,000)
Payment of finance leases obligations
(204,467)
25,735
Dividends paid
(225,000)
(270,000)
Net cash used in financing activities
(501,467)
(316,265)
Net increase/(decrease) in cash and cash equivalents
684,052
(272,563)
Cash and cash equivalents at beginning of Period
397,852
670,415
Cash and cash equivalents at end of Period
1,081,904
397,852
ARM PIPETEK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2024
- 13 -
1
Accounting policies
Company information

ARM Pipetek Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 8, Belmont Industrial Estate, Durham, DH1 1TN.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
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.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

1.4
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 values over their useful lives on the following bases:

Plant and equipment
15% Reducing balance
Fixtures and fittings
25% Reducing balance
Computers
33.3% Straight line
Motor vehicles
25% Reducing balance

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

ARM PIPETEK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 14 -
1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.6
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials.

 

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.

1.7
Construction contracts

Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the reporting end date. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.

 

When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.

 

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred where it is probable that they will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When costs incurred in securing a contract are recognised as an expense in the period in which they are incurred, they are not included in contract costs if the contract is obtained in a subsequent period.

The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.

ARM PIPETEK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 15 -
1.8
Cash and cash equivalents

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.

1.9
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 instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

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.

Basic financial assets

Basic financial assets, which include 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.

Classification of financial liabilities

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.

Basic financial liabilities

Basic financial liabilities, including creditors, 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 cost, 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.

1.10
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.

1.11
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

ARM PIPETEK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 16 -
Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.12
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.

1.13
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.14
Leases

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 profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

ARM PIPETEK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 17 -
2
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.

3
Turnover

An analysis of the company's turnover is as follows:

2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
11,971,197
10,971,143
4
Operating profit
2024
2023
Operating profit for the period is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
8,000
-
0
Depreciation of owned tangible fixed assets
90,704
82,536
Depreciation of tangible fixed assets held under finance leases
178,580
176,942
Loss on disposal of tangible fixed assets
10,761
40,051
Operating lease charges
247,482
155,424
5
Employees

The average monthly number of persons (including directors) employed by the company during the Period was:

2024
2023
Number
Number
127
125
ARM PIPETEK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
5
Employees
(Continued)
- 18 -

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
4,575,189
4,379,885
Social security costs
474,320
464,984
Pension costs
102,947
100,318
5,152,456
4,945,187
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
37,710
35,879
7
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
14,187
12,635
Other finance costs:
Interest on finance leases and hire purchase contracts
55,226
56,336
Other interest
7,917
9,989
77,330
78,960
8
Amounts written off investments
2024
2023
£
£
Amounts written back to current loans
-
6,328
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
40,383
-
0
Tax relating to prior year adjustments recognised in profit or loss
138
-
0
Total current tax
40,521
-
0
ARM PIPETEK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
9
Taxation
2024
2023
£
£
(Continued)
- 19 -
Deferred tax
Origination and reversal of timing differences
171,091
85,826
Total tax charge
211,612
85,826

The actual charge for the Period can be reconciled to the expected charge for the Period based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
Profit before taxation
819,966
379,766
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 25.00%)
204,992
94,942
Tax effect of expenses that are not deductible in determining taxable profit
6,482
5,841
Adjustments in respect of prior years
138
(5,790)
Superdeduction in capital allowances
-
0
(41,798)
Change in tax rate
-
0
32,631
Taxation charge for the period
211,612
85,826
10
Dividends
2024
2023
£
£
Interim paid
225,000
270,000
ARM PIPETEK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 20 -
11
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
Cost
At 30 April 2023
2,230,860
11,858
60,136
516,810
2,819,664
Additions
186,414
148
3,541
-
0
190,103
Disposals
(81,130)
-
0
-
0
(33,239)
(114,369)
At 30 April 2024
2,336,144
12,006
63,677
483,571
2,895,398
Depreciation and impairment
At 30 April 2023
772,320
5,116
55,651
377,439
1,210,526
Depreciation charged in the Period
230,316
1,704
3,431
33,833
269,284
Eliminated in respect of disposals
(55,405)
-
0
-
0
(29,203)
(84,608)
At 30 April 2024
947,231
6,820
59,082
382,069
1,395,202
Carrying amount
At 30 April 2024
1,388,913
5,186
4,595
101,502
1,500,196
At 29 April 2023
1,458,540
6,742
4,485
139,371
1,609,138

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2024
2023
£
£
12
Stocks
2024
2023
£
£
Raw materials and consumables
17,577
42,000
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,733,361
1,418,802
Corporation tax recoverable
4,962
17,813
Other debtors
70,401
27,511
Prepayments and accrued income
106,834
55,549
1,915,558
1,519,675
ARM PIPETEK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
13
Debtors
(Continued)
- 21 -
2024
2023
Amounts falling due after more than one year:
£
£
Trade debtors
39,174
50,492
Total debtors
1,954,732
1,570,167
14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
16
72,000
72,000
Obligations under finance leases
17
323,588
325,740
Payments received on account
728,200
138,000
Trade creditors
806,259
715,018
Corporation tax
40,561
2,135
Other taxation and social security
69,458
381,515
Other creditors
384,232
272,660
Accruals and deferred income
312,857
174,964
2,737,155
2,082,032

Net obligations under finance lease and hire purchase contracts of £323,588 (2023 : £325,740) are secured by fixed charges on the assets concerned.

 

15
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
16
78,000
150,000
Obligations under finance leases
17
478,508
680,823
556,508
830,823

Net obligations under finance lease and hire purchase contracts of £478,508 (2023 : £680,823) are secured by fixed charges on the assets concerned.

ARM PIPETEK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 22 -
16
Loans and overdrafts
2024
2023
£
£
Bank loans
150,000
222,000
Payable within one year
72,000
72,000
Payable after one year
78,000
150,000

The long-term loans are secured by fixed and floating charges over the assets and undertaking of the company.

 

17
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
323,588
325,740
In two to five years
478,508
680,823
802,096
1,006,563

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

18
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
371,768
393,094
Tax losses
-
(193,225)
Retirement benefit obligations
(11,521)
(10,712)
360,247
189,157
ARM PIPETEK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
18
Deferred taxation
(Continued)
- 23 -
2024
Movements in the Period:
£
Liability at 30 April 2023
189,157
Charge to profit or loss
171,090
Liability at 30 April 2024
360,247

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
102,947
100,318

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.

20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
Ordinary A shares of £1 each
52
52
52
52
152
152
152
152
21
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2024
2023
£
£
Within one year
155,886
111,379
Between two and five years
361,325
290,372
517,211
401,751
ARM PIPETEK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 24 -
22
Related party transactions

During the period the company had the following related party transactions on normal commercial terms

Rent of £56,821 (2023 £44,167) and a management charge of £10,800 (2023 £Nil) was paid to 23UK Ltd, a company in which one of this company’s directors, Dale Watson, is a director and shareholder

A management charge of £36,000 (2023 £Nil) was paid to Elson Constructors Ltd, a company in which two of this company’s directors, Steven Wood and Stephen Burke, are directors.

 

23
Directors' transactions

Interest free loans have been granted by the company to its directors as follows:

Description
% Rate
Opening balance
Amounts advanced
Closing balance
£
£
£
Loan
-
14,475
529
15,004
14,475
529
15,004
24
Cash generated from operations
2024
2023
£
£
Profit for the Period after tax
608,354
293,940
Adjustments for:
Taxation charged
211,612
85,826
Finance costs
77,330
78,960
Loss on disposal of tangible fixed assets
10,761
40,051
Depreciation and impairment of tangible fixed assets
269,284
259,478
Other gains and losses
-
(6,328)
Movements in working capital:
Decrease in stocks
24,423
2,650
(Increase)/decrease in debtors
(396,887)
524,654
Increase/(decrease) in creditors
618,849
(682,065)
Cash generated from operations
1,423,726
597,166
25
Analysis of changes in net funds/(debt)
30 April 2023
Cash flows
30 April 2024
£
£
£
Cash at bank and in hand
397,852
684,052
1,081,904
Borrowings excluding overdrafts
(222,000)
72,000
(150,000)
Obligations under finance leases
(1,006,563)
204,467
(802,096)
(830,711)
960,519
129,808
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