The directors present the strategic report for the year ended 31 December 2022.
A key strength of the company is its proven ability to undertake drylining schemes in a wide diversity of projects in education, healthcare, commercial, retail, residential and leisure sectors of the industry. Systems are installed to meet both aesthetic and functional requirements as well as specific fire, acoustic, thermal, durability and structural criteria. Construction is not just confined to lightweight partitions - the company installs load bearing metal stud systems for external walls, internal elements and high bay separating walls, as well as complete frames. Our highly experienced project teams provide advice and guidance on contractual matters, programming, design aspects and optimum cost solutions.
The overall performance of the business in the year is broadly in line with expectations. Turnover of £17m in the year achieved plan driven largely by a key customer having a strong financial performance which maintained demand for the goods and services supplied by Kelbenton. The gross profit percentage was maintained at 8% and net profit increased to 2%.
The company was able to pay a dividend of £125,000 and at the year end the company was still in a very strong position with total equity being £4.1m.
The directors acknowledge that while construction volumes have remained strong in our sectors, the UK market will continue to be highly competitive for the foreseeable future due to inflationary pressures on raw materials and labour shortages and this presents a potential risk for the company.
There does remain some uncertainty about the impact of global inflationary pressures over the short term but we feel confident that we can secure projects in sectors that remain buoyant in the medium term.
The company’s business does involve a number of inherent risks which are captured in the risk register and these are monitored regularly by the management team who will manage this risk by continuing its philosophy of providing the highest quality of products and services to existing clients.
Our supply chain has also been affected by large increases in raw material prices during the year. The directors are hopeful that the impact of these increases can be managed by working closely with our supply chain and customers.
The company refers to key performance indicators in order to monitor business performance with reference to time, cost, quality and health and safety. Management also focuses on financial targets, being turnover, margin and return on capital employed.
The business maintains a strong capital base to allow us to meet current contractual commitments and liquidity has improved during the following year. This will enable us to deliver further growth and to ensure that the company can withstand the challenge of any macro-economic issues such as the Pandemic in the future.
Health and safety ranks equally with all other business objectives and is integrated into every part of our operations. Essential to this policy is the identification, management or elimination of risk, although we cannot do it alone. We collaborate at every level to gain co-operation and full support to guarantee effective implementation.
Making a positive contribution to the communities where we work has always been a central part of the company’s philosophy. Our community engagement activities range from promoting local employment and training on our projects to fundraising and sponsorship. We work with our clients to help build better futures for the next generation.
We recognise that our people are our most valuable resource. It is the company’s aim to create a culture of learning and personal development where employees at every level and the company take joint responsibility for on-going training and improvement.
The company recognises that some of its activities may have an impact on the environment and are committed to reducing and minimising that impact through continually seeking to improve environmental performance by ensuring that all our employees and manufacturing supply chain develop a sound understanding of any possible environmental impacts and what is expected of them. The company has an environmental training programme and has introduced waste reduction and recycling initiatives at all locations. We also seek to use the most environmentally efficient modes of transport and reduce unnecessary travel.
By order of the board
The directors present their annual report and financial statements for the year ended 31 December 2022.
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £125,000. The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
In accordance with the company's articles, a resolution proposing that Mayfield & Co. be reappointed as auditor of the company will be put at a General Meeting.
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
Basis for 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
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
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.
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.
The objectives of our audit are to identify and assess the risks of material misstatement of the financial statements due to fraud or error; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud or error; and to respond appropriately to those risks. Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK).
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:
We obtained an understanding of the legal and regulatory frameworks applicable to the Company and the sector in which it operates. We determined that the following laws and regulations were most significant: the Companies Act 2006, the UK Corporate Governance Code and UK corporate taxation laws.
We obtained an understanding of how the Company is complying with those legal and regulatory frameworks by making inquiries to the management. We corroborated our inquiries through our review of relevant papers provided to the Directors.
We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:
identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
challenging assumptions and judgments made by management in its significant accounting estimates;
identifying and testing journal entries, in particular any journal entries posted with unusual account combinations; and
assessing the extent of compliance with the relevant laws and regulations.
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 member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
Kelbenton Limited is a private company limited by shares incorporated in England and Wales. The registered office is 1934 The Yard, Exploration Drive, Leicester, LE4 5JD.
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 £.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Measom Holdings Limited. These consolidated financial statements are available from its registered office, 1934 The Yard, Exploration Drive, Leicester, United Kingdom, LE4 5JD.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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.
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 fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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 third party.
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, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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.
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.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
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.
The whole of the turnover is attributable to the company's principal activity.
The average monthly number of persons (including directors) employed by the company during the year was:
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
During the year the company entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
The following amounts were outstanding at the reporting end date:
Kelbenton Limited is a wholly owned subsidiary of Measom Holdings Limited, a company incorporated in England & Wales whose registered address is 1934 The Yard, Exploration Drive, Leicester LE4 5JD. The financial statements of the company are consolidated in the financial statements of Measom Holdings Limited. These consolidated financial statements are available from its registered office.
The ultimate parent company is Riversands Limited, a company incorporated in the Isle of Man, whose registered office is 8 St George's Street, Douglas, Isle of Man, IM1 1AH.