| REGISTERED NUMBER: |
| STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
| FINANCIAL STATEMENTS |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| FOR |
| TERRA FIRMA PIPELINE LIMITED |
| REGISTERED NUMBER: |
| STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
| FINANCIAL STATEMENTS |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| FOR |
| TERRA FIRMA PIPELINE LIMITED |
| TERRA FIRMA PIPELINE LIMITED (REGISTERED NUMBER: 04089690) |
| CONTENTS OF THE FINANCIAL STATEMENTS |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| Page |
| Company Information | 1 |
| Strategic Report | 2 |
| Report of the Directors | 4 |
| Report of the Independent Auditors | 6 |
| Income Statement | 9 |
| Other Comprehensive Income | 10 |
| Balance Sheet | 11 |
| Statement of Changes in Equity | 12 |
| Cash Flow Statement | 13 |
| Notes to the Cash Flow Statement | 14 |
| Notes to the Financial Statements | 15 |
| TERRA FIRMA PIPELINE LIMITED |
| COMPANY INFORMATION |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| DIRECTORS: |
| SECRETARY: |
| REGISTERED OFFICE: |
| REGISTERED NUMBER: |
| AUDITORS: |
| Chartered Accountants |
| & Registered Auditors |
| 162-164 High Street |
| Rayleigh |
| Essex |
| SS6 7BS |
| TERRA FIRMA PIPELINE LIMITED (REGISTERED NUMBER: 04089690) |
| STRATEGIC REPORT |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| The directors present their strategic report for the year ended 31st October 2024. |
| REVIEW OF BUSINESS |
| I am pleased to deliver the financial results for the year ended 31st October 2024. |
| The company delivered turnover of approximately £35 million and a gross profit of circa £4.5 million (12.9% margin). The 5.3% fall in gross margin levels (in absolute terms) is disappointing given management had targeted a higher margin. The key cost categories that contributed to the lower gross margin continued to be sub-contractors and plant hire (notably Vacuum Excavations). The focus on growing the order book has resulted in a disproportionate increase in cost of sales. |
| The board was in the process of reviewing its plan to address this when certain unforeseen events resulted in the Company's residential gas main replacement contracts ceasing. Management were then required to focus on realigning the business to its water, commercial gas and complex works customer contracts. |
| Administrative expenses increased 17% year on year but given the 33% increase in turnover this was to be expected. In the current financial year the business is expected to report significantly lower levels of turnover following the changes in the sector/customer mix away from residential gas main replacement to water, and commercial gas and complex works and are targeting a higher gross margin from this reduced turnover base. |
| We continue to focus on cost savings throughout the company to seek to improve our gross margin and increase operating profitability. The Company's recycling centre was closed following the changes in sales mix/customers as there was insufficient material being generated outside of the residential gas mains replacement work to warrant running a recycling centre. In addition, the Company also reviewed the number of operating sites it was operating from and decided to consolidate those into two sites. This resulted in the Company's Beckton head office site being sold as it was deemed to be surplus to the Company's requirements (see post Balance Sheet Event note) and the Company entering into a new lease agreement for an operating centre in Brentwood, Essex. |
| Cost control and growing turnover remain the key focal points for management. |
| The Key Performance Indicators are considered to be: |
| Sales £35m (2023 - £26.3m) - up 33% |
| Gross profit £4.4m (2023 - £4.8m) - down 8% |
| Gross margin 12.6% (2023 - 18.2%) - down 30% |
| Operating loss £0.16m (2023 - profit £1.05m) - down 115% |
| INVESTMENT AND FUTURE DEVELOPMENTS |
| The investment in plant and machinery in 2023/24 was approximately £1.1m (£1.2m in 2023). Capital investment is expected to decrease in 2024/25 as the business downsizes its fleet to match the current work streams. |
| The value of the company's fixed asset base excluding property at the end of the 2023/24 financial year was £4 million. The company's bankers and shareholders remain supportive of the company's working capital needs. |
| TERRA FIRMA PIPELINE LIMITED (REGISTERED NUMBER: 04089690) |
| STRATEGIC REPORT |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| CUSTOMERS |
| The pipeline for the beginning of 2023/24 financial year was very robust and that is reflected in the turnover growth. The residential gas mains replacement operations ceased around the end of October 2024 and the change in the Company's sales pipeline for 2024/25 has reflected the new sales mix. It is difficult to predict the outturn for the current financial year as we have incurred a significant level of costs relating to the residential gas operations ceasing however it is highly likely that we will show a loss in 2024/25 results. |
| The Company is now focused on servicing a discreet number of clients in the water, commercial gas and complex works space and those clients are all considered to be blue chip in nature. |
| ON BEHALF OF THE BOARD: |
| TERRA FIRMA PIPELINE LIMITED (REGISTERED NUMBER: 04089690) |
| REPORT OF THE DIRECTORS |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| The directors present their report with the financial statements of the company for the year ended 31st October 2024. |
| PRINCIPAL ACTIVITY |
| The principal activity of the company in the year under review was that of utility contractors. |
| DIVIDENDS |
| The total distribution of dividends for the year ended 31st October 2024 will be £ |
| EVENTS SINCE THE END OF THE YEAR |
| Information relating to events since the end of the year is given in the notes to the financial statements. |
| DIRECTORS |
| The directors shown below have held office during the whole of the period from 1st November 2023 to the date of this report. |
| FINANCIAL INSTRUMENTS |
| The company's operations expose it to a variety of financial risks that include the effect of changes in liquidity risk and interest rate risk.The company has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the company by monitoring levels of debt finance and the related finance costs. |
| Given the size of the company, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The policies set by the board of directors are implemented by the company's finance department. |
| Liquidity risk |
| The company actively maintains a mixture of long-term and short-term debt finance that is designed to ensure it has sufficient available funds for operations and planned extensions. |
| Interest rate cash flow risk |
| The company has both interest bearing assets and interest bearing liabilities. Interest bearing assets include only cash balances held on deposit. |
| Credit risk |
| The company has implemented policies that require appropriate credit checks on potential customers before sales are made. The amount of exposure to individual customers is subject to a limit, which is reassessed regularly by the board. |
| Price risk |
| The company's exposed to commodity price risk as a result of its operations. However, given the size of the company's operations, the costs of managing exposure to commodity price risk exceed any potential benefits. The directors will revisit the appropriateness of this policy should the company's operations change in size or nature. |
| TERRA FIRMA PIPELINE LIMITED (REGISTERED NUMBER: 04089690) |
| REPORT OF THE DIRECTORS |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| 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). 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, ESW Limited, will be proposed for appointment at the forthcoming Annual General Meeting. |
| ON BEHALF OF THE BOARD: |
| REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
| TERRA FIRMA PIPELINE LIMITED |
| Opinion |
| We have audited the financial statements of Terra Firma Pipeline Limited (the 'company') for the year ended 31st October 2024 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
| In our opinion the financial statements: |
| - | give a true and fair view of the state of the company's affairs as at 31st October 2024 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. |
| Emphasis of matter |
| We draw attention to Note 2 to the financial statements, which describes the directors’ assessment of the company’s ability to continue as a going concern. The company incurred a loss during the year and is dependent on continued financial support from its shareholders and bank facilities. As stated in Note 2, the directors have received confirmation of ongoing support and have concluded that the going concern basis of preparation is appropriate. Our opinion is not modified in respect of this matter. |
| 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. |
| REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
| TERRA FIRMA PIPELINE LIMITED |
| 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. |
| 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 |
| TERRA FIRMA PIPELINE 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: |
| The company is subject to numerous laws and regulations that could reasonably be expected to have a material effect on the financial statements. From our general commercial experience and discussion with management, we identified the following laws and regulations; health and safety, employment law and taxes, financial reporting and distributable profits. |
| Our audit procedures to address potential fraud and non-compliance with laws and regulations included: |
| - Enquiry of management and staff |
| - Review of legal documentation and correspondence |
| - Analytical review to identify unexpected account movements and investigation of variances |
| - Assessment of potential management override by review of journals and unusual accounting entries |
| - Identification and review of transactions with related parties |
| - Review of year end cut-off and after date transactions |
| 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. |
| for and on behalf of |
| Chartered Accountants |
| & Registered Auditors |
| 162-164 High Street |
| Rayleigh |
| Essex |
| SS6 7BS |
| TERRA FIRMA PIPELINE LIMITED (REGISTERED NUMBER: 04089690) |
| INCOME STATEMENT |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| 2024 | 2023 |
| Notes | £ | £ |
| TURNOVER | 3 |
| Cost of sales | ( |
) | ( |
) |
| GROSS PROFIT |
| Administrative expenses | ( |
) | ( |
) |
| (235,987 | ) | 824,890 |
| Other operating income |
| OPERATING (LOSS)/PROFIT | 5 | ( |
) |
| Interest receivable and similar income |
| (161,969 | ) | 1,049,677 |
| Interest payable and similar expenses | 6 | ( |
) | ( |
) |
| (LOSS)/PROFIT BEFORE TAXATION | ( |
) |
| Tax on (loss)/profit | 7 | ( |
) |
| PROFIT FOR THE FINANCIAL YEAR |
| TERRA FIRMA PIPELINE LIMITED (REGISTERED NUMBER: 04089690) |
| OTHER COMPREHENSIVE INCOME |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| 2024 | 2023 |
| Notes | £ | £ |
| PROFIT FOR THE YEAR |
| OTHER COMPREHENSIVE INCOME |
| Property revaluation reserve movement | ( |
) | ( |
) |
| Income tax relating to other comprehensive income |
| OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX |
( |
) |
( |
) |
| TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
| TERRA FIRMA PIPELINE LIMITED (REGISTERED NUMBER: 04089690) |
| BALANCE SHEET |
| 31ST OCTOBER 2024 |
| 2024 | 2023 |
| Notes | £ | £ |
| FIXED ASSETS |
| Tangible assets | 9 |
| CURRENT ASSETS |
| Debtors | 10 |
| Cash at bank |
| CREDITORS |
| Amounts falling due within one year | 11 | ( |
) | ( |
) |
| NET CURRENT ASSETS |
| TOTAL ASSETS LESS CURRENT LIABILITIES |
| CREDITORS |
| Amounts falling due after more than one year |
12 |
( |
) |
( |
) |
| PROVISIONS FOR LIABILITIES | 16 | ( |
) | ( |
) |
| NET ASSETS |
| CAPITAL AND RESERVES |
| Called up share capital | 17 |
| Revaluation reserve | 18 |
| Capital redemption reserve | 18 |
| Retained earnings | 18 |
| SHAREHOLDERS' FUNDS |
| The financial statements were approved by the Board of Directors and authorised for issue on |
| TERRA FIRMA PIPELINE LIMITED (REGISTERED NUMBER: 04089690) |
| STATEMENT OF CHANGES IN EQUITY |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| Called up | Capital |
| share | Retained | Revaluation | redemption | Total |
| capital | earnings | reserve | reserve | equity |
| £ | £ | £ | £ | £ |
| Balance at 1st November 2022 |
| Changes in equity |
| Dividends | - | ( |
) | - | - | ( |
) |
| Total comprehensive income | - | ( |
) |
| Balance at 31st October 2023 |
| Changes in equity |
| Dividends | - | ( |
) | - | - | ( |
) |
| Total comprehensive income | - | ( |
) |
| Balance at 31st October 2024 |
| TERRA FIRMA PIPELINE LIMITED (REGISTERED NUMBER: 04089690) |
| CASH FLOW STATEMENT |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| 2024 | 2023 |
| Notes | £ | £ |
| Cash flows from operating activities |
| Cash generated from operations | 1 |
| Interest paid | ( |
) | ( |
) |
| Interest element of hire purchase payments paid |
( |
) |
( |
) |
| Finance costs paid | - | (6,056 | ) |
| Taxation refund |
| Net cash from operating activities | ( |
) |
| Cash flows from investing activities |
| Purchase of tangible fixed assets | ( |
) | ( |
) |
| Sale of tangible fixed assets |
| Interest received |
| Net cash from investing activities | ( |
) |
| Cash flows from financing activities |
| New loans in year |
| Loan repayments in year | ( |
) | ( |
) |
| Hire purchase repayments in year | ( |
) | ( |
) |
| Amount withdrawn by directors | (10,859 | ) | 12,468 |
| Equity dividends paid | ( |
) | ( |
) |
| Net cash from financing activities | ( |
) | ( |
) |
| Increase/(decrease) in cash and cash equivalents | ( |
) |
| Cash and cash equivalents at beginning of year |
2 |
1,388,256 |
| Cash and cash equivalents at end of year | 2 | 876,720 | 98,663 |
| TERRA FIRMA PIPELINE LIMITED (REGISTERED NUMBER: 04089690) |
| NOTES TO THE CASH FLOW STATEMENT |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| 1. | RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
| 2024 | 2023 |
| £ | £ |
| (Loss)/profit before taxation | ( |
) |
| Depreciation charges |
| Loss on disposal of fixed assets |
| Finance costs | 297,174 | 250,898 |
| Finance income | (1,554 | ) | (3,437 | ) |
| 552,235 | 1,657,118 |
| Decrease/(increase) in trade and other debtors | ( |
) |
| Increase in trade and other creditors |
| Cash generated from operations |
| 2. | CASH AND CASH EQUIVALENTS |
| The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
| Year ended 31st October 2024 |
| 31.10.24 | 1.11.23 |
| £ | £ |
| Cash and cash equivalents | 876,720 | 98,663 |
| Year ended 31st October 2023 |
| 31.10.23 | 1.11.22 |
| £ | £ |
| Cash and cash equivalents | 98,663 | 1,388,256 |
| 3. | ANALYSIS OF CHANGES IN NET DEBT |
| At 1.11.23 | Cash flow | At 31.10.24 |
| £ | £ | £ |
| Net cash |
| Cash at bank and in hand | 98,663 | 778,057 | 876,720 |
| 98,663 | 876,720 |
| Debt |
| Finance leases | (1,388,104 | ) | (294,543 | ) | (1,682,647 | ) |
| Debts falling due within 1 year | (287,517 | ) | (46,908 | ) | (334,425 | ) |
| Debts falling due after 1 year | (1,911,644 | ) | 388,249 | (1,523,395 | ) |
| (3,587,265 | ) | 46,798 | (3,540,467 | ) |
| Total | (3,488,602 | ) | 824,855 | (2,663,747 | ) |
| TERRA FIRMA PIPELINE LIMITED (REGISTERED NUMBER: 04089690) |
| NOTES TO THE FINANCIAL STATEMENTS |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| 1. | STATUTORY INFORMATION |
| Terra Firma Pipeline Limited is a |
| 2. | ACCOUNTING POLICIES |
| Basis of preparing the financial statements |
| The financial statements have been prepared on a going concern basis. The company incurred a loss of £459,000 for the year ended 31st October 2024 and is forecasting a further loss in the current financial year. These losses primarily reflect the company's ongoing strategic realignment of its operations, transitioning away from residential gas-related activities toward water infrastructure services and commercial gas-related activities as detailed in the strategic report. |
| The company is reliant on the continued financial support of its principal shareholder and existing banking facilities. The shareholder has confirmed their intention to provide financial support for the foreseeable future, and the company continues to have access to its existing bank facilities. |
| 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 discounts. |
| Rendering of services: |
| Turnover from rendering of services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied: |
| 1. the amount of turnover can be measured reliably; |
| 2. it is probable that the Company will receive the consideration due under the contract; |
| 3. the stage of completion of the contract at the end of the reporting period can be measured reliably; and |
| 4. the costs incurred and the costs to complete the contract can be measured reliably. |
| Tangible fixed assets |
| Freehold property | - |
| Improvements to property | - |
| Plant and machinery | - |
| Motor vehicles | - |
| Computer equipment | - |
| 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. |
| TERRA FIRMA PIPELINE LIMITED (REGISTERED NUMBER: 04089690) |
| NOTES TO THE FINANCIAL STATEMENTS - continued |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| 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 instruments are recognised 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 trade and other 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. |
| 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 and 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. |
| Derecognition of financial assets |
| Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated party. |
| 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 trade and other creditors and bank loans, 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. |
| Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. |
| Derecognition of financial liabilities |
| Financial liabilities are derecognised when, and only when, the company's contractual obligations are discharged, cancelled, or they expire. |
| Equity instruments |
| Equity instruments issued by the company are recorded at the fair value of 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. |
| TERRA FIRMA PIPELINE LIMITED (REGISTERED NUMBER: 04089690) |
| NOTES TO THE FINANCIAL STATEMENTS - continued |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| 2. | ACCOUNTING POLICIES - continued |
| 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. |
| Hire purchase and leasing commitments |
| Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter. |
| The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability. |
| 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. |
| 3. | TURNOVER |
| The turnover and loss (2023 - profit) before taxation are attributable to the one principal activity of the company. |
| An analysis of turnover by class of business is given below: |
| 2024 | 2023 |
| £ | £ |
| An analysis of turnover by geographical market is given below: |
| 2024 | 2023 |
| £ | £ |
| United Kingdom |
| TERRA FIRMA PIPELINE LIMITED (REGISTERED NUMBER: 04089690) |
| NOTES TO THE FINANCIAL STATEMENTS - continued |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| 4. | EMPLOYEES AND DIRECTORS |
| 2024 | 2023 |
| £ | £ |
| Wages and salaries |
| Social security costs |
| Other pension costs |
| The average number of employees during the year was as follows: |
| 2024 | 2023 |
| Employees | 47 | 50 |
| Directors | 2 | 2 |
| 2024 | 2023 |
| £ | £ |
| Directors' remuneration |
| 5. | OPERATING (LOSS)/PROFIT |
| The operating loss (2023 - operating profit) is stated after charging: |
| 2024 | 2023 |
| £ | £ |
| Hire of plant, machinery and |
| vehicles |
| Depreciation - owned assets |
| Depreciation - assets on hire purchase contracts |
| Loss on disposal of fixed assets |
| Auditors' remuneration |
| Auditors' remuneration for non audit work |
| 6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
| 2024 | 2023 |
| £ | £ |
| Bank loan interest |
| Hire purchase |
| Corporation tax interest |
| TERRA FIRMA PIPELINE LIMITED (REGISTERED NUMBER: 04089690) |
| NOTES TO THE FINANCIAL STATEMENTS - continued |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| 7. | TAXATION |
| Analysis of the tax (credit)/charge |
| The tax (credit)/charge on the loss for the year was as follows: |
| 2024 | 2023 |
| £ | £ |
| Current tax: |
| UK corporation tax |
| Over provision prior year | (465,417 | ) | (153,569 | ) |
| Total current tax | ( |
) | ( |
) |
| Deferred tax | ( |
) |
| Tax on (loss)/profit | ( |
) |
| Reconciliation of total tax (credit)/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: |
| 2024 | 2023 |
| £ | £ |
| (Loss)/profit before tax | ( |
) |
| (Loss)/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 | ( |
) | ( |
) |
| Tax losses carried forward | 156,764 | - |
| Deferred tax movement | (102,544 | ) | 209,416 |
| Overprovided tax in previous year | (465,417 | ) | (153,569 | ) |
| Change in tax rate | - | (6,692 | ) |
| Total tax (credit)/charge | (567,961 | ) | 116,553 |
| Tax effects relating to effects of other comprehensive income |
| 2024 |
| Gross | Tax | Net |
| £ | £ | £ |
| Property revaluation reserve movement | ( |
) | - | (9,560 | ) |
| 2023 |
| Gross | Tax | Net |
| £ | £ | £ |
| Property revaluation reserve movement | ( |
) | - | (9,560 | ) |
| 8. | DIVIDENDS |
| 2024 | 2023 |
| £ | £ |
| Interim |
| TERRA FIRMA PIPELINE LIMITED (REGISTERED NUMBER: 04089690) |
| NOTES TO THE FINANCIAL STATEMENTS - continued |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| 9. | TANGIBLE FIXED ASSETS |
| Improvements |
| Freehold | to | Plant and |
| property | property | machinery |
| £ | £ | £ |
| COST OR VALUATION |
| At 1st November 2023 |
| Additions |
| Disposals | ( |
) |
| At 31st October 2024 |
| DEPRECIATION |
| At 1st November 2023 |
| Charge for year |
| Eliminated on disposal | ( |
) |
| At 31st October 2024 |
| NET BOOK VALUE |
| At 31st October 2024 |
| At 31st October 2023 |
| Motor | Computer |
| vehicles | equipment | Totals |
| £ | £ | £ |
| COST OR VALUATION |
| At 1st November 2023 |
| Additions |
| Disposals | ( |
) | ( |
) |
| At 31st October 2024 |
| DEPRECIATION |
| At 1st November 2023 |
| Charge for year |
| Eliminated on disposal | ( |
) | ( |
) |
| At 31st October 2024 |
| NET BOOK VALUE |
| At 31st October 2024 |
| At 31st October 2023 |
| The freehold property at 5 Eastbury Road, Beckton was valued on an open market basis in January 2022 by RES Property Surveyors, a chartered surveyor, at approximately £1.7 million. The company's other freehold property is valued at cost, which the directors believe is a fair representation of the current market value. |
| As detailed in Note 20, both properties were sold following the year end. |
| TERRA FIRMA PIPELINE LIMITED (REGISTERED NUMBER: 04089690) |
| NOTES TO THE FINANCIAL STATEMENTS - continued |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| 9. | TANGIBLE FIXED ASSETS - continued |
| Fixed assets, included in the above, which are held under hire purchase contracts are as follows: |
| Plant and | Motor |
| machinery | vehicles | Totals |
| £ | £ | £ |
| COST OR VALUATION |
| At 1st November 2023 |
| Additions |
| At 31st October 2024 |
| DEPRECIATION |
| At 1st November 2023 |
| Charge for year |
| At 31st October 2024 |
| NET BOOK VALUE |
| At 31st October 2024 |
| At 31st October 2023 |
| 10. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
| 2024 | 2023 |
| £ | £ |
| Trade debtors |
| Other debtors |
| Tax |
| Prepayments and accrued income |
| 11. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
| 2024 | 2023 |
| £ | £ |
| Bank loans and overdrafts (see note 13) |
| Hire purchase contracts (see note 14) |
| Trade creditors |
| Tax |
| Social security and other taxes |
| VAT | 158,294 | 178,733 |
| Other creditors |
| Directors' current accounts | 2,460 | 13,319 |
| Accruals and deferred income |
| TERRA FIRMA PIPELINE LIMITED (REGISTERED NUMBER: 04089690) |
| NOTES TO THE FINANCIAL STATEMENTS - continued |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| 12. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
| 2024 | 2023 |
| £ | £ |
| Bank loans (see note 13) |
| Hire purchase contracts (see note 14) |
| 13. | LOANS |
| An analysis of the maturity of loans is given below: |
| 2024 | 2023 |
| £ | £ |
| Amounts falling due within one year or on demand: |
| Bank loans |
| Amounts falling due between two and five years: |
| Bank loans - 2-5 years |
| Amounts falling due in more than five years: |
| Repayable by instalments |
| Bank loans more than 5 years |
| by instalments | 831,662 | 1,188,154 |
| 831,662 | 1,188,154 |
| TERRA FIRMA PIPELINE LIMITED (REGISTERED NUMBER: 04089690) |
| NOTES TO THE FINANCIAL STATEMENTS - continued |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| 14. | LEASING AGREEMENTS |
| Minimum lease payments fall due as follows: |
| Hire purchase contracts |
| 2024 | 2023 |
| £ | £ |
| Gross obligations repayable: |
| Within one year |
| Between one and five years |
| Finance charges repayable: |
| Within one year |
| Between one and five years |
| Net obligations repayable: |
| Within one year |
| Between one and five years |
| Non-cancellable operating | leases |
| 2024 | 2023 |
| £ | £ |
| Within one year |
| Between one and five years |
| 15. | SECURED DEBTS |
| The following secured debts are included within creditors: |
| 2024 | 2023 |
| £ | £ |
| Bank loans |
| Hire purchase contracts | 1,682,647 | 1,388,104 |
| Assets acquired under hire purchase are secured by those agreements. |
| The bank loans are secured by registered charges over the company's freehold properties. Lloyds bank also hold a fixed and floating charge over the assets of the company. |
| TERRA FIRMA PIPELINE LIMITED (REGISTERED NUMBER: 04089690) |
| NOTES TO THE FINANCIAL STATEMENTS - continued |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| 16. | PROVISIONS FOR LIABILITIES |
| 2024 | 2023 |
| £ | £ |
| Deferred tax |
| Accelerated capital allowances |
| Other timing differences | 112,818 | 112,818 |
| 914,001 | 1,016,545 |
| Deferred |
| tax |
| £ |
| Balance at 1st November 2023 |
| Accelerated capital allowances | (102,544 | ) |
| Property revaluation |
| Balance at 31st October 2024 |
| 17. | CALLED UP SHARE CAPITAL |
| Allotted, issued and fully paid: |
| Number: | Class: | Nominal | 2024 | 2023 |
| value: | £ | £ |
| Ordinary shares | £1 | 99 | 99 |
| 18. | RESERVES |
| Capital |
| Retained | Revaluation | redemption |
| earnings | reserve | reserve | Totals |
| £ | £ | £ | £ |
| At 1st November 2023 | 5,642,093 |
| Profit for the year |
| Dividends | ( |
) | ( |
) |
| Depreciation movement | - | (9,560 | ) | - | (9,560 | ) |
| At 31st October 2024 | 5,681,351 |
| 19. | RELATED PARTY DISCLOSURES |
| The balance sheet includes balances with companies which have common directors and shareholders in Terra Firma Pipeline Limited; |
| 2024 | 2023 |
| AW Rentals Limited | Other debtors | 155,000 | 155,000 |
| AW Rentals Limited | Trade debtors | - | 42,000 |
| AW Rentals Limited | Trade creditors | (137,057 | ) | (57,757 | ) |
| Terra Firma Housing Ltd | Other debtors | 10,000 | 10,000 |
| Goliath Mouldings Ltd | Other debtors | 281,519 | 264,519 |
| Bucks Training Academy Ltd | Other debtors | 51,378 | 51,378 |
| Terra Firma Rail Ltd | Other debtors | 288,597 | 498,506 |
| Terra Firma Rail Ltd | Trade debtors | 37,440 | 24,480 |
| TERRA FIRMA PIPELINE LIMITED (REGISTERED NUMBER: 04089690) |
| NOTES TO THE FINANCIAL STATEMENTS - continued |
| FOR THE YEAR ENDED 31ST OCTOBER 2024 |
| 20. | POST BALANCE SHEET EVENTS |
| In October 2024 following an incident on one of our residential gas mains replacement contracts the Company's residential gas operations ceased. This resulted in certain closure costs for redundancies and other associated costs being incurred. Following these operational changes the Company entered into negotiations to sell its principal operating facility and head office. A sale was agreed in Q1 of 2025. In addition, the Company's investment property in Buckinghamshire was acquired, on an arms length basis, by a company owned and controlled by the Company's principal shareholder. |
| 21. | ULTIMATE CONTROLLING PARTY |
| The ultimate controlling party is |