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Registered number: 01628477









Kinetic Recruitment Services Limited









Annual report and financial statements

For the Year Ended 31 March 2023

 
Kinetic Recruitment Services Limited
 
 
Company Information


Directors
J Heseltine 
N Betton 
S Taggart 




Company secretary
N Betton



Registered number
01628477



Registered office
Lancastrian Office Centre
Talbot Road

Stretford

Manchester

M32 0FP




Independent auditors
Hurst Accountants Limited
Chartered Accountants and Statutory Auditors

Lancashire Gate

21 Tiviot Dale

Stockport

SK1 1TD





 
Kinetic Recruitment Services Limited
 

Contents



Page
Strategic report
 
1 - 2
Directors' report
 
3 - 4
Independent auditors' report
 
5 - 8
Statement of comprehensive income
 
9
Balance sheet
 
10
Statement of changes in equity
 
11
Notes to the financial statements
 
12 - 24


 
Kinetic Recruitment Services Limited
 
 
Strategic Report
For the Year Ended 31 March 2023

Introduction
 
Kinetic Recruitment Services Limited provides human resource and staffing services to the manufacturing, engineering and technical markets predominantly in the UK.

Business review
 
The company is well diversified in a number of core segments, principally within engineering and manufacturing. 
The company's growth strategy will continue with further diversification into industrial and engineering markets with our contract and permanent offerings within the UK as well as enhancing the human resource and staffing services offerings within its other brands.

The key financial and other performance indicators during the year were as follows:
      
 2023  2022  % Change 
Turnover £'000     13,107  13,534  (3%) 
Gross profit £'000                               2,013  1,737  16% 
Equity shareholders funds £'000   3,545  3,647  (3%) 
Fixed assets £'000                157  192  (18%) 
Current assets as a % of current liabilities   191%  191%  0% 
Average number of employees   35  34  3% 

Turnover decreased by 3% delivering a consistent result to the prior year however gross profit increased 16% mainly attributable to an increase in permanent revenue. The business has been affected by effects of rising inflation and increased staffing costs leading to an increase in administrative expenses of £112k (5.7% increase). Rising interest rates has resulted in an increase in interest payable of £54k on the prior year.
The number of employees remains consistent in comparison to 2022. There are plans to increase the employee numbers into 2023 to enable further growth within the business.
Kinetic Recruitment Services continuing commitment to employees being the company's greatest asset as an employee owned company. All employees equally share in the success of the business. All employee owners receive detailed updates on the performance of the business and are engaged at all levels with the goal to work as a group supporting one another.

Principal risks and uncertainties
 
Commercial risks to the core business continue to be challenging external market forces and industry legislation costs. There is an acute shortage of skilled engineering personnel in the UK impacted by Brexit and the restrictions to the flow of candidates from the continent. Such risks we have mitigated with further investment in other platforms and tools to attract suitable candidates alongside our well established in house database.
For risk management of Brexit, a full review of the customer base has been carried out including supply chain wherever possible. Kinetic plc is not exposed to import or export trading and has all cash reserves in sterling with no debt.
Challenges within the current economic climate with increased inflation and interest rates are having to be managed very carefully in an attempt to control overhead costs. 
Bad debts remain a significant risk and we have robust systems in place to mitigate such risks. We credit check all potential clients and have credit insurance in place for our key customers that are reviewed monthly for exposure.
The directors have reviewed Kinetic plc’s business model and strategy and we operate a full risk register managed within our BS 9001:2015 British Quality Standard accreditation.

Page 1

 
Kinetic Recruitment Services Limited
 

Strategic Report (continued)
For the Year Ended 31 March 2023

Financial key performance indicators
 
Operational KPI’s: Numbers of timesheets on a weekly basis alongside the number of trading clients on a monthly basis. Full forecasts of the following months permanent recruitment pipeline are tracked to actual results on a monthly basis. Scheduled interviews, candidates placed, number of calls made and number of client visits are all measured and reported real time via monitors set up in each of the offices.
Key financial indicators are measured at an office level to compare actual results against budgets and the prior year on a monthly basis. These are all reported on a monthly basis via the monthly management accounts along with the profit and loss accounts for each of the businesses in the group.

Other key performance indicators
 
Kinetic plc also operates balanced scorecard to monitor strategy and to ensure the business is continuing to drive innovation and cost management throughout the organisation. Critical success factors continue to be focused on customer development and satisfaction, internal business process, finance and employee learning and growth. Examples of additional measures are application rates and placement rates from the job boards and other tools we use to ensure a good return on investment.


This report was approved by the board and signed on its behalf.



J Heseltine
Director

Date: 12 October 2023

Page 2

 
Kinetic Recruitment Services Limited
 
 
 
Directors' Report
For the Year Ended 31 March 2023

The directors present their report and the financial statements for the year ended 31 March 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Company's financial statements and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Results and dividends

The loss for the year, after taxation, amounted to £102,184 (2022 -loss £141,877).

Dividends of £nil were paid in the year (2022: £305,000). The directors do not recommend payment of final dividend.

Directors

The directors who served during the year were:

J Heseltine 
N Betton 
S Taggart 

Future developments

An indication of the likely future developments in the company's business is provided in the Strategic Report.

Page 3

 
Kinetic Recruitment Services Limited
 
 
 
Directors' Report (continued)
For the Year Ended 31 March 2023

Financial instruments

The company makes little use of financial instruments other than trade debtors, trade creditors, cash at bank and an invoice discounting facility.  The objective is to ensure that there is a continuity of funding, that cash levels are sufficient to meet the ongoing needs of the business, and that there is flexibility to deal with unforeseen events.  The policy is to smooth cash management and to arrange funding ahead of requirements, should it be needed.
Credit risk
The objective is to reduce the risk of loss arising from default by customers.  The policy is to ensure customer debt and credit ratings are routinely monitored, as well as the use of a credit insurance policy.
Interest risk
The objective is to limit the company's exposure to interest rate fluctuations.  At present, the company only has secured bank borrowings in the form of an invoice discounting facility and maintains a policy of interest rate management.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Auditors

The auditorsHurst Accountants Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 





N Betton
Secretary
Date: 12 October 2023

Page 4

 
Kinetic Recruitment Services Limited
 
 
 
Independent auditors' report to the members of Kinetic Recruitment Services Limited
 

Opinion


We have audited the financial statements of Kinetic Recruitment Services Limited (the 'Company') for the year ended 31 March 2023, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 March 2023 and of its loss 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 United Kingdom, including the Financial Reporting Council'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 Auditors' 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.


Page 5

 
Kinetic Recruitment Services Limited
 
 
 
Independent auditors' report to the members of Kinetic Recruitment Services Limited (continued)


Opinion 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 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.


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:


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 Directors' responsibilities statement set out on page 3, 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.


Page 6

 
Kinetic Recruitment Services Limited
 
 
 
Independent auditors' report to the members of Kinetic Recruitment Services Limited (continued)


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 an Auditors' 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.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Identifying and assessing potential risks related to irregularities
In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
• The nature of the industry and sector in which the company operates; the control environment and business            performance including key drivers for directors' remuneration, bonus levels and performance targets.
• The outcome of enquiries of local management and parent company management, including whether management    was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge   of any actual, suspected, or alleged fraud. 
• Supporting documentation relating to the Company's policies and procedures for:
    - Identifying, evaluating, and complying with laws and regulations
    - Detecting and responding to the risks of fraud
• The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
• The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the    financial statements and any potential indicators of fraud.
• The legal and regulatory framework in which the Company operates, particularly those laws and regulations which    have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or    which had a fundamental effect on the operations of the Company, including application of the Employment    Agencies Act 1973, Agency Workers Regulations 2010, Working Time Regulations 1998, Conduct of Employment   Agencies and Regulations 2003, General Data Protection Requirements, and Anti-bribery and Corruption.
Audit response to risks identified
Our procedures to respond to the risks identified included the following:
• Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with    the provisions of those relevant laws and regulations which have a direct effect on the financial statements.
• Discussions with management, including consideration of known or suspected instances of non-compliance with    laws and regulations and fraud.
• Evaluation of management’s controls designed to prevent and detect irregularities.
• Enquiring of management about any actual and potential litigation and claims.
• Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of    material misstatement due to fraud.
We have also considered the risk of fraud through management override of controls by:
• Testing the appropriateness of journal entries and other adjustments. We have used data analytics software to    identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or   error.
• Challenging assumptions made by management in their significant accounting estimates, and assessing whether the    judgements made in making accounting estimates are indicative of a potential bias; and
 
Page 7

 
Kinetic Recruitment Services Limited
 
 
 
Independent auditors' report to the members of Kinetic Recruitment Services Limited (continued)


• Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of    business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them.  Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.


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 Auditors' 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 2006Our 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 Auditors' 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.





Mike Jackson (senior statutory auditor)
for and on behalf of
Hurst Accountants Limited
Chartered Accountants and Statutory Auditors
Lancashire Gate
21 Tiviot Dale
Stockport
SK1 1TD

23 October 2023
Page 8

 
Kinetic Recruitment Services Limited
 
 
Statement of Comprehensive Income
For the Year Ended 31 March 2023

2023
2022
Note
£
£

  

Turnover
 4 
13,106,858
13,533,896

Cost of sales
  
(11,093,844)
(11,796,603)

Gross profit
  
2,013,014
1,737,293

Administrative expenses
  
(2,062,800)
(1,950,880)

Other operating income
 5 
-
103,430

Operating loss
 6 
(49,786)
(110,157)

Interest receivable and similar income
 10 
1,577
-

Interest payable and similar expenses
 11 
(76,511)
(22,834)

Loss before tax
  
(124,720)
(132,991)

Tax on loss
 12 
22,536
(8,886)

Loss for the financial year
  
(102,184)
(141,877)

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 12 to 24 form part of these financial statements.

Page 9

 
Kinetic Recruitment Services Limited
Registered number: 01628477

Balance Sheet
As at 31 March 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 14 
156,803
192,235

Investments
 15 
2
2

  
156,805
192,237

Current assets
  

Debtors: amounts falling due within one year
 16 
7,163,864
7,091,945

Cash at bank and in hand
 17 
27,091
203,165

  
7,190,955
7,295,110

Creditors: amounts falling due within one year
 18 
(3,782,588)
(3,813,375)

Net current assets
  
 
 
3,408,367
 
 
3,481,735

Total assets less current liabilities
  
3,565,172
3,673,972

Provisions for liabilities
  

Deferred tax
 19 
(20,499)
(27,115)

Net assets
  
3,544,673
3,646,857


Capital and reserves
  

Called up share capital 
 20 
50,000
50,000

Profit and loss account
 21 
3,494,673
3,596,857

  
3,544,673
3,646,857


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




J Heseltine
Director

Date: 12 October 2023

The notes on pages 12 to 24 form part of these financial statements.

Page 10

 
Kinetic Recruitment Services Limited
 

Statement of Changes in Equity
For the Year Ended 31 March 2023


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 April 2021
50,000
4,043,734
4,093,734


Comprehensive income for the year

Loss for the year
-
(141,877)
(141,877)


Contributions by and distributions to owners

Dividends: Equity capital
-
(305,000)
(305,000)



At 1 April 2022
50,000
3,596,857
3,646,857


Comprehensive income for the year

Loss for the year
-
(102,184)
(102,184)


At 31 March 2023
50,000
3,494,673
3,544,673


The notes on pages 12 to 24 form part of these financial statements.

Page 11

 
Kinetic Recruitment Services Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

1.


General information

Kinetic Recruitment Services Limited is a private company limited by members capital and incorporated in England and Wales, registered number 01628477. The address of the registered office and principal place of business is Lancastrian Office Centre, Talbot Road, Stretford, Manchester, M32 0FP. The nature of the company's operation and principal activity is human resource management services.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Kinetic Plc as at 31 March 2023 and these financial statements may be obtained from Companies House.

 
2.3

Going concern

The financial statements have been prepared on a going concern basis. The following paragraphs set out the basis of which the directors have reached their conclusion.
Whilst the economic impact within the manufacturing and engineering recruitment markets has been significant, the company is well capitalised with a diversified business model to withstand the current and future climate.
The company currently meets its working capital requirements through their cash and bank funding.  Based on the company's forecasts and projections, the directors believe they have sufficient facilities to trade through the next 12 months.
Therefore, the directors believe it is appropriate to prepare the accounts to 31 March 2023 on a going concern basis and that there will be no adverse effect on solvency for more than 12 months after the date of approval of the financial statements.

Page 12

 
Kinetic Recruitment Services Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

2.Accounting policies (continued)

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide 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:
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

The Company operates in the recruitment industry and has two main revenue streams. Contractor revenue is recognised based on time worked during the period and placement revenue is recognised based on the start date of the successful candidate.

 
2.5

Operating leases: the Company as lessee

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

 
2.6

Government grants

Grants of a revenue nature are recognised in the Statement of comprehensive income in the same period as the related expenditure.

 
2.7

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.8

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.9

Pensions

The company operates a defined contribution pension scheme and the pension charge represents the amounts payable by the company to the fund in respect of that year.

Page 13

 
Kinetic Recruitment Services Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

2.Accounting policies (continued)

 
2.10

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 
2.11

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Fixtures and fittings
-
15%
Straight line
Computer equipment
-
20%
Straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.12

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment. Where merger relief is applicable, the cost of the investment in a subsidiary undertaking is measured at the nominal value of the shares issued together with the fair value of any additional consideration paid.

Page 14

 
Kinetic Recruitment Services Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

2.Accounting policies (continued)

 
2.13

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.14

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.15

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.16

Holiday pay accrual

A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date.

 
2.17

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. 

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of comprehensive income.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.

Financial assets and liabilities are offset and the net amount reported in the Balance sheet when there is an 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.
Page 15

 
Kinetic Recruitment Services Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

2.Accounting policies (continued)


2.17
Financial instruments (continued)


 
2.18

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

Preparation of the financial statements requires management to make significant judgements and estimates.  The items in the financial statements where these judgements and estimates have been made include:
Recoverable value of trade debtors
The company has recognised trade debtors with a carrying value of £3,428,286 (2022: £3,380,043). The recoverability of trade debtors is regularly reviewed in the light of the available economic information specific to each debtor and specific provisions are recognised for balances considered to be at risk or irrecoverable.
Tangible fixed assets
The management of the company exercises judgement in estimating the useful economic life of fixtures & fittings and computer equipment.  At the year end tangible fixed assets have a net book value of £156,803 (2022: £192,235).
Accruals and provision
Accruals and provisions are entered in the financial statements based on management expectations, taking into account various business and economic factors relevant to each individual item.


4.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Human resource management services
13,106,858
13,533,896


All turnover arose within the United Kingdom.


5.


Other operating income

2023
2022
£
£

Government grants receivable
-
103,430


Page 16

 
Kinetic Recruitment Services Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

6.


Operating loss

The operating loss is stated after charging:

2023
2022
£
£

Operating lease rentals - land and buildings
101,760
101,437

Operating lease rentals - other
27,803
28,888

Defined contribution pension cost
62,800
55,723

Depreciation of tangible fixed assets
56,376
51,509


7.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors:


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements

17,500
17,400

The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent Company.


8.


Employees

Staff costs, including directors' remuneration, were as follows:


2023
2022
£
£

Wages and salaries
1,273,139
1,135,606

Social security costs
150,283
125,485

Cost of defined contribution scheme
62,800
55,723

1,486,222
1,316,814


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Sales and administrative staff
35
34

Page 17

 
Kinetic Recruitment Services Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

9.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
209,398
111,315

Company contributions to defined contribution pension schemes
18,839
3,068

228,237
114,383


During the year retirement benefits were accruing to 3 directors (2022 -2) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £83,585 (2022 -£77,600).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £9,406 (2022 -£3,000).

There are no key management personnel other than the directors. 


10.


Interest receivable

2023
2022
£
£


Interest from overdue debtors
1,577
-


11.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
41,645
14,534

Loans from group undertakings
34,866
8,300

76,511
22,834

Page 18

 
Kinetic Recruitment Services Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

12.


Taxation


2023
2022
£
£

Corporation tax


Current tax on losses for the year
(15,920)
(15,126)


Total current tax
(15,920)
(15,126)

Deferred tax


Origination and reversal of timing differences
(6,616)
24,012

Total deferred tax
(6,616)
24,012


Taxation on (loss)/profit on ordinary activities
(22,536)
8,886

Factors affecting tax charge for the year

The tax assessed for the year is lower than (2022 -higher than) the standard rate of corporation tax in the UK of 19% (2022 -19%). The differences are explained below:

2023
2022
£
£


Loss on ordinary activities before tax
(124,720)
(132,991)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2022 -19%)
(23,697)
(25,268)

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
534
685

Short-term timing difference leading to an increase (decrease) in taxation
-
(9,246)

Other timing differences leading to an increase (decrease) in taxation
627
-

Non-taxable income less expenses not deductible for tax purposes, other than goodwill and impairment
-
4,338

Unrelieved tax losses carried forward
-
38,377

Total tax charge for the year
(22,536)
8,886


Factors that may affect future tax charges

The main rate of corporation tax increased to 25% in the tax year commencing 1 April 2023 for companies where profits exceed £250,000.  A tapered rate was introduced for profits above £50,000 up to the £250,000 limit.

Page 19

 
Kinetic Recruitment Services Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

13.


Dividends

2023
2022
£
£


Dividends paid on equity capital
-
305,000


14.


Tangible fixed assets





Fixtures & fittings
Computer equipment
Total

£
£
£



Cost or valuation


At 1 April 2022
19,516
464,227
483,743


Additions
10,332
10,612
20,944


Disposals
(2,183)
(228,778)
(230,961)



At 31 March 2023

27,665
246,061
273,726



Depreciation


At 1 April 2022
11,434
280,074
291,508


Charge for the year on owned assets
3,164
53,212
56,376


Disposals
(2,183)
(228,778)
(230,961)



At 31 March 2023

12,415
104,508
116,923



Net book value



At 31 March 2023
15,250
141,553
156,803



At 31 March 2022
8,082
184,153
192,235

Page 20

 
Kinetic Recruitment Services Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

15.


Fixed asset investments





Investments in subsidiary companies

£



Cost or valuation


At 1 April 2022
2



At 31 March 2023
2





Subsidiary undertaking


The following was a subsidiary undertaking of the Company:

Name

Registered office

Principal activity

Class of shares

Holding

   The Kinetic Employment Benefit Trust Limited
   Lancastrian Office Centre, 
Talbot Road, 
Stretford, 
Manchester, 
M32 0FP
Dormant
Ordinary
100%


16.


Debtors

2023
2022
£
£


Trade debtors
3,428,286
3,380,043

Amounts owed by group undertakings
3,556,679
3,547,177

Other debtors
61,032
61,031

Prepayments and accrued income
117,867
103,694

7,163,864
7,091,945


An impairment loss of £nil (2022: £nil) was recognised against trade debtors. 

Page 21

 
Kinetic Recruitment Services Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

17.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
27,091
203,165

Less: invoice discounting facility
(1,633,954)
(1,591,119)

(1,606,863)
(1,387,954)



18.


Creditors: Amounts falling due within one year

2023
2022
£
£

Invoice discounting facility
1,633,954
1,591,119

Trade creditors
51,691
36,662

Amounts owed to group undertakings
1,050,000
950,140

Other taxation and social security
694,559
739,198

Other creditors
114,567
271,251

Accruals and deferred income
237,817
225,005

3,782,588
3,813,375


The invoice discounting facility is secured against the assets of the company.

Page 22

 
Kinetic Recruitment Services Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

19.


Deferred taxation




2023
2022


£

£






At beginning of year
(27,115)
(3,103)


Charged to profit or loss
6,616
(24,012)



At end of year
(20,499)
(27,115)

The provision for deferred taxation is made up as follows:

2023
2022
£
£


Accelerated capital allowances
(26,590)
(33,015)

Other timing differences
6,091
5,900

(20,499)
(27,115)


20.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



25,000 (2022 -25,000) Ordinary shares of £1.00 each
25,000
25,000
25,000 (2022 -25,000) 'A' Ordinary shares of £1.00 each
25,000
25,000

50,000

50,000

Ordinary shares have the rights to voting and dividends.
'A' Ordinary shares have the rights to dividends.



21.


Reserves

Profit & loss account
The profit and loss account includes all current and prior period retained profits and losses. 

Page 23

 
Kinetic Recruitment Services Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 March 2023

22.


Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £62,800 (2022: £55,723). Contributions totalling £32,057 (2022: £31,053) were payable to the fund at the balance sheet date.


23.


Commitments under operating leases

At 31 March 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£

Land and Buildings


Not later than 1 year
83,598
76,498

Later than 1 year and not later than 5 years
84,063
48,802

167,661
125,300

2023
2022

£
£

Other


Not later than 1 year
17,705
24,648

Later than 1 year and not later than 5 years
2,908
17,374

20,613
42,022


24.


Related party transactions

The company's ultimate parent undertaking is Kinetic Plc. The company has taken advantage of the exemption contained in FRS 102 Section 33 "Related Party Transactions" not to disclose transactions with other wholly owned group companies. 
Key management personnel is considered to be the directors.


25.


Controlling party

The company is exempt from the obligation to prepare and deliver group accounts. The company is a subsidiary undertaking of Kinetic Plc which is the ultimate parent company, incorporated in England and Wales, registered number 06545585.  The company is under the ultimate control of the Kinetic Employee Ownership Trust by virtue of its 94.91% interest in the voting share capital of Kinetic Plc.
The largest group in which the results of the company are consolidated is that headed by Kinetic Plc. The consolidated financial statements of this group are available to the public and may be obtained from the Registrar of Companies, Companies House, Crown Way, Maindy, Cardiff, CF4 3UZ. No other group accounts include the results of the company.

Page 24

 
Kinetic Recruitment Services Limited