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REGISTERED NUMBER: 01157216 (England and Wales)













Strategic Report, Report of the Directors and

Financial Statements

for the Year Ended 31 December 2023

for

Kelston Sparkes Contractors Limited

Kelston Sparkes Contractors Limited (Registered number: 01157216)






Contents of the Financial Statements
for the Year Ended 31 December 2023




Page

Company Information 1

Strategic Report 2

Report of the Directors 3

Statement of Directors' Responsibilities 4

Report of the Independent Auditors 5

Statement of Comprehensive Income 8

Balance Sheet 9

Statement of Changes in Equity 10

Cash Flow Statement 11

Notes to the Cash Flow Statement 12

Notes to the Financial Statements 13


Kelston Sparkes Contractors Limited

Company Information
for the Year Ended 31 December 2023







DIRECTORS: A K Sparkes
R Stark
D Swann
K D Stark



SECRETARY: R Stark



REGISTERED OFFICE: Bromley
Stanton Drew
Bristol
Somerset
BS39 4DE



REGISTERED NUMBER: 01157216 (England and Wales)



SENIOR STATUTORY AUDITOR: Michael Cook BSc FCA



AUDITORS: A C Mole LLP
Chartered Accountants
& Statutory Auditor
Stafford House
Blackbrook Park Avenue
Taunton
Somerset
TA1 2PX

Kelston Sparkes Contractors Limited (Registered number: 01157216)

Strategic Report
for the Year Ended 31 December 2023

The directors present their strategic report for the year ended 31 December 2023.

REVIEW OF BUSINESS
The results for the year and financial position of the company are shown in the annexed financial statements.

The company undertakes comprehensive business planning to define long term strategic objectives and goals. Annual budgets and operational plans are prepared utilising financial Key Performance Indicators ("KPI's"). Business performance, measured by KPI's (including monitoring of actual results against budget targets) and bank balances is reported to the directors on a monthly basis.

The turnover for the company for the year was £20,517,164 (2022 - £18,663,978) and the gross profit margin achieved was 14.2% (2022 - 12.8%).

The company has had another very strong year and continues the growth we have seen in recent years. The provision of materials and third party subcontractors within our large contracts has enabled the company to continue its growth. Crucially, this growth has been achieved without sacrificing our gross profit margin.


The Directors anticipate that the company will trade profitably for the forthcoming year.

PRINCIPAL RISKS AND UNCERTAINTIES
As with any business, Kelston Sparkes Contractors Limited faces a number of risks and uncertainties in the course of its day to day operations. By effectively identifying and managing these risks their effects can be mitigated.

The principal risk to the company is a deterioration in demand from the UK Construction Industry. Any deterioration in economic conditions may significantly decrease demand which could have a material effect on revenues, margins, profits and debt levels.

The Directors also constantly monitor the state of receivables, as this remains a key factor in protecting the company's cash flow in the short and medium term.

FUTURE DEVELOPMENTS
The directors will continue to monitor costs closely in order to maintain profitability, whilst not compromising on quality and service. The directors will also continue to diversify into new products and markets when appropriate.

ON BEHALF OF THE BOARD:





R Stark - Director


2 September 2024

Kelston Sparkes Contractors Limited (Registered number: 01157216)

Report of the Directors
for the Year Ended 31 December 2023

The directors present their report with the financial statements of the company for the year ended 31 December 2023.

PRINCIPAL ACTIVITY
The principal activity of the company in the year under review was that of earth-moving contractors.

DIVIDENDS
No dividends will be distributed for the year ended 31 December 2023.

DIRECTORS
The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report.

A K Sparkes
R Stark
D Swann
K D Stark

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The directors are responsible for monitoring financial risk. Appropriate policies have been developed and implemented to identify, evaluate and manage the key risks.

a) Price risk - The company is exposed to price risk as a result of its operations. Due to the economic climate the company has to quote competitive prices to win work. The directors are aware of the risks in selling and providing services at low margins and as the trading environment improves the directors will consider improving margins.

b) Credit risk - The company has implemented policies that require appropriate credit checks on customers before contracts are entered into. The credit given to customers is subject to limits which are determined and reassessed by the directors.

c) Liquidity risk - The company is reliant upon the continued support of its bankers. Budgets and cash flow projections are prepared and regularly monitored to ensure that the company operates within these facilities.

d) Interest rate cash flow risk - The company has a bank overdraft facility which is repayable on demand. The interest charged on the overdraft is at a competitive rate of interest.

e) Economic risk - The company's performance is directly impacted by the economic environment. In order to manage this risk the company strives to deliver competitively priced services. The company is actively concentrating on improving efficiency and reducing costs.

GOING CONCERN
The company has net current liabilities at the balance sheet date. It is reliant on the continued support of its parent company Kelston Sparkes Holdings Limited and other group companies, who have confirmed they will continue to provide support to Kelston Sparkes Quarry Services Limited.

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, A C Mole LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:





R Stark - Director


2 September 2024

Kelston Sparkes Contractors Limited (Registered number: 01157216)

Statement of Directors' Responsibilities
for the Year Ended 31 December 2023

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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards) and applicable law, including Financial Reporting Standard 102 Reduced Disclosure Framework (FRS 102).

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;
-state whether applicable United Kingdom Accounting Standards, including FRS 102, have been followed,
subject to any material departures disclosed and explained in the financial statements;
-notify the company's shareholders in writing about the use of disclosure exemptions, if any, of FRS 102 used in
the preparation of financial statements; and
-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.

Report of the Independent Auditors to the Members of
Kelston Sparkes Contractors Limited

Opinion
We have audited the financial statements of Kelston Sparkes Contractors Limited (the 'company') for the year ended 31 December 2023 which comprise the Statement of 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 31 December 2023 and of its profit for the year then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information
The directors are responsible for the other information. The other information comprises the information in the Strategic Report, the Report of the Directors and the Statement of Directors' Responsibilities, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

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.

Report of the Independent Auditors to the Members of
Kelston Sparkes Contractors Limited


Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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.

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:

Identifying and assessing potential risks of material misstatement due to irregularities.

We considered the following when identifying and assessing risks of material misstatement due to irregularities,
including fraud and non-compliance with laws and regulations;

- the legal and regulatory framework within which the business operates
- the nature of the industry in which the business operates
- the control environment and internal controls established to mitigate such risks
- the results of our enquiries of management about their own identification and assessment of risks of irregularities
- discussions within the audit engagement team and with the group auditors about where fraud might occur.

Laws and regulations which are considered to be significant to the entity include those relating to the construction
industry, the requirements of the financial reporting framework FRS 102, the Companies Act 2006 and UK tax
legislation. In addition we considered other laws and regulations which may not directly impact the financial statements but may impact on the operations of the company, such as the changes arising following Brexit.

As a result of these procedures we concluded that the greatest potential for material misstatements due to fraud arose in respect of sales being overstated. In common with all audits under International Auditing Standards we also
concluded that a risk in relation to the potential for management override of controls existed.

Audit responses to the risks identified

We undertook audit procedures to respond to the risks identified, and designed our audit testing to respond to these
risks. The additional procedures we undertook included the following:

- Gaining an understanding of the company's procedures for ensuring compliance with laws and regulations.
- Controls testing over sales
- Substantive and additional testing of provisions on work in progress
- Testing the appropriateness of journal entries and other adjustments
- Considering whether accounting estimates were indicative of potential bias
- Considering any transactions which arose outside the normal course of business
- Making enquiries of management
- Corroborating our enquiries through the review of Board Minutes and review of correspondence.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team
members. We remained alert to any indications of fraud or non-compliance with laws and regulations throughout the
audit.

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.

Report of the Independent Auditors to the Members of
Kelston Sparkes Contractors Limited


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.




Michael Cook BSc FCA (Senior Statutory Auditor)
For and on behalf of A C Mole LLP
Chartered Accountants
& Statutory Auditor
Stafford House
Blackbrook Park Avenue
Taunton
Somerset
TA1 2PX

4 September 2024

Kelston Sparkes Contractors Limited (Registered number: 01157216)

Statement of Comprehensive Income
for the Year Ended 31 December 2023

2023 2022
Notes £    £   

TURNOVER 4 20,517,164 18,663,978

Cost of sales 17,604,742 16,273,705
GROSS PROFIT 2,912,422 2,390,273

Administrative expenses 2,149,350 1,980,244
763,072 410,029

Other operating income 920,131 860,344
OPERATING PROFIT 6 1,683,203 1,270,373

Interest receivable and similar income 344,498 90,691
2,027,701 1,361,064

Interest payable and similar expenses 7 16,578 7,009
PROFIT BEFORE TAXATION 2,011,123 1,354,055

Tax on profit 8 - -
PROFIT FOR THE FINANCIAL YEAR 2,011,123 1,354,055

OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR

2,011,123

1,354,055

Kelston Sparkes Contractors Limited (Registered number: 01157216)

Balance Sheet
31 December 2023

2023 2022
Notes £    £   
CURRENT ASSETS
Debtors: amounts falling due within one year 9 4,391,799 2,952,354
Debtors: amounts falling due after more than
one year

9

7,180,661

3,421,609
Cash at bank 9,532 1,019,706
11,581,992 7,393,669
CREDITORS
Amounts falling due within one year 10 4,996,861 2,896,235
NET CURRENT ASSETS 6,585,131 4,497,434
TOTAL ASSETS LESS CURRENT
LIABILITIES

6,585,131

4,497,434

CREDITORS
Amounts falling due after more than one
year

11

273,064

196,490
NET ASSETS 6,312,067 4,300,944

CAPITAL AND RESERVES
Called up share capital 13 276,000 276,000
Retained earnings 14 6,036,067 4,024,944
SHAREHOLDERS' FUNDS 6,312,067 4,300,944

The financial statements were approved by the Board of Directors and authorised for issue on 2 September 2024 and were signed on its behalf by:




A K Sparkes - Director



R Stark - Director


Kelston Sparkes Contractors Limited (Registered number: 01157216)

Statement of Changes in Equity
for the Year Ended 31 December 2023

Called up
share Retained Total
capital earnings equity
£    £    £   
Balance at 1 January 2022 276,000 2,670,889 2,946,889

Changes in equity
Total comprehensive income - 1,354,055 1,354,055
Balance at 31 December 2022 276,000 4,024,944 4,300,944

Changes in equity
Total comprehensive income - 2,011,123 2,011,123
Balance at 31 December 2023 276,000 6,036,067 6,312,067

Kelston Sparkes Contractors Limited (Registered number: 01157216)

Cash Flow Statement
for the Year Ended 31 December 2023

2023 2022
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 2,344,384 739,408
Tax paid - 418,081
Net cash from operating activities 2,344,384 1,157,489

Cash flows from investing activities
Interest received 344,498 90,691
Net cash from investing activities 344,498 90,691

Cash flows from financing activities
(Increase) in intergroup debtors (3,759,052 ) (1,019,337 )
Increase in intergroup creditors 76,574 27,009
Interest paid (16,578 ) (7,009 )
Net cash from financing activities (3,699,056 ) (999,337 )

(Decrease)/increase in cash and cash equivalents (1,010,174 ) 248,843
Cash and cash equivalents at beginning
of year

2

1,019,706

770,863

Cash and cash equivalents at end of year 2 9,532 1,019,706

Kelston Sparkes Contractors Limited (Registered number: 01157216)

Notes to the Cash Flow Statement
for the Year Ended 31 December 2023

1. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS
2023 2022
£    £   
Profit before taxation 2,011,123 1,354,055
Decrease/(Increase) on contracts (214,401 ) (706,177 )
Finance costs 16,578 7,009
Finance income (344,498 ) (90,691 )
1,468,802 564,196
Increase in trade and other debtors (1,225,044 ) (67,513 )
Increase in trade and other creditors 2,100,626 242,725
Cash generated from operations 2,344,384 739,408

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 31 December 2023
31.12.23 1.1.23
£    £   
Cash and cash equivalents 9,532 1,019,706
Year ended 31 December 2022
31.12.22 1.1.22
£    £   
Cash and cash equivalents 1,019,706 770,863


3. ANALYSIS OF CHANGES IN NET FUNDS

At 1.1.23 Cash flow At 31.12.23
£    £    £   
Net cash
Cash at bank 1,019,706 (1,010,174 ) 9,532
1,019,706 (1,010,174 ) 9,532
Total 1,019,706 (1,010,174 ) 9,532

Kelston Sparkes Contractors Limited (Registered number: 01157216)

Notes to the Financial Statements
for the Year Ended 31 December 2023

1. STATUTORY INFORMATION

Kelston Sparkes Contractors Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).


The company is an earth-moving contractor.

2. STATEMENT OF COMPLIANCE

These financial statements have been prepared in accordance with UK accounting standards, including Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" ("FRS 102") and the Companies Act 2006.

3. ACCOUNTING POLICIES

Basis of preparation
These financial statements are prepared on a going concern basis, under the historical cost convention, as modified by certain financial assets and liabilities measured at fair value through profit or loss.

Going concern
The company meets its day-to-day working capital requirements through the Kelston Sparkes Holdings Limited group bank facilities and borrowings. The Kelston Sparkes Holdings Limited group forecasts and projections, taking account of possible changes in trading conditions, show that the group should be able to operate within the level of its current bank facilities and borrowings.

The company has net current liabilities at the balance sheet date. It is reliant on the continued support of its parent company Kelston Sparkes Holdings Limited and other group companies, who have confirmed they will continue to provide support to Kelston Sparkes Contractors Limited.

The Directors therefore continue to adopt the going concern basis in preparing the financial statements.

Related party exemption
The company has taken advantage of the exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Turnover
Turnover represents net invoiced contracting services excluding VAT. Where revenue has been earned but not yet invoiced an appropriate proportion of revenue is recognised and an amount included within debtors as amounts recoverable on contracts.


Kelston Sparkes Contractors Limited (Registered number: 01157216)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

3. ACCOUNTING POLICIES - continued
Taxation
The taxation expense for the period comprises current and deferred tax recognised in the reporting period. 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. In this case tax is also recognised in other comprehensive income or directly into equity respectively.

i) Current tax
Current tax is the amount of income tax payable in respect of the taxable profit for the year or prior years. Tax is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

ii) Deferred tax
Deferred tax arises from timing differences that are differences between taxable profits and total comprehensive income as stated in the financial statements. These timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements.

Deferred tax is recognised on all timing differences at the balance sheet date, except for certain exceptions. Unrelieved tax losses and other deferred tax assets are only recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of the timing difference.

Pension costs and other post-retirement benefits
The company operates a defined contribution pension scheme for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions to a separate entity. Once the contributions have been paid the company has no further payment obligations. The contributions are recognised as an expense when they fall due. Amounts not paid are shown in accruals in the balance sheet. The assets of the plan are held separately from the company in independently administered funds.

Other operating income
Other operating income consists of recharges of salaries to other group companies and reflect the time that individuals have worked for those companies throughout the year.

Kelston Sparkes Contractors Limited (Registered number: 01157216)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

3. ACCOUNTING POLICIES - continued

Financial instruments
i) Financial assets
Basic financial assets, including trade and other receivables and cash and bank balances are initially recognised at transaction price and subsequently measured at amortised cost.

At the balance sheet date financial assets are assessed for evidence of impairment. If an asset is impaired the impairment loss is recognised in the income statement.

ii) Financial liabilities
Basic financial liabilities, including trade and other payables and bank overdrafts, are initially recognised at transaction price and subsequently measured at amortised cost.

Critical accounting judgements and estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. Having given due consideration to the estimates and assumptions that form part of the carrying amounts of assets and liabilities within the financial statements, the directors are of the opinion that the only material judgement or estimate relates to forecast profit margins on long term contracts. The accounting policy for long term contracts is summarised above.

As at 31 December 2023 the cost accrual in relation to long term contracts amounted to £1,750,000.

Management forecast total contract profit margins based on their experience of the industry, the specific contract, and contract performance to date. Where appropriate, contract performance after the balance sheet date is also taken into account. However, contracts may span a number of years, and actual profit margins could be materially different to those forecast.

4. TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by class of business is given below:

2023 2022
£    £   
Services 20,517,164 18,663,978
20,517,164 18,663,978

5. EMPLOYEES AND DIRECTORS


2023 2022
£    £   
Directors' remuneration 141,907 117,507
Directors' pension contributions to money purchase schemes 2,642 2,259

Kelston Sparkes Contractors Limited (Registered number: 01157216)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

5. EMPLOYEES AND DIRECTORS - continued

Employee costs during year: 2023 2022
£    £   

Wages and salaries 2,324,760 1,924,613
Social security 241,624 220,055
Pensions 41,032 39,434
2,607,416 2,184,102

Average number of persons employed No. No.

Administration 21 19
Site personnel 26 23
47 42

Key management compensation
Key management includes the directors and members of senior management. The compensation paid to key management for their services totalled £696,575 (2022 - £644,417).


The number of directors whom retirement benefits were accruing was as follows:

Money purchase schemes 2 2


6. OPERATING PROFIT

The operating profit is stated after charging:

2023 2022
£    £   
Auditors' remuneration of company 4,500 4,500
Auditors' remuneration taxation compliance services 750 750
Auditors' remuneration non-audit services 1,836 2,030
Hire of plant and machinery 5,189,960 4,169,871

7. INTEREST PAYABLE AND SIMILAR EXPENSES
2023 2022
£    £   
Bank interest 4 -
Inter-company interest 16,574 7,009
16,578 7,009

8. TAXATION

Analysis of the tax charge
No liability to UK corporation tax arose for the year ended 31 December 2023 nor for the year ended 31 December 2022.

Kelston Sparkes Contractors Limited (Registered number: 01157216)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

8. TAXATION - continued

Reconciliation of total tax charge included in profit and loss
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2023 2022
£    £   
Profit before tax 2,011,123 1,354,055
Profit multiplied by the standard rate of corporation tax in the UK of
23.500% (2022 - 19%)

472,614

257,270

Effects of:
Expenses not deductible for tax purposes 1,556 201
Research and development enhanced expenditure - (239,032 )
credit

Group relief (474,170 ) (18,439 )
Total tax charge - -

9. DEBTORS
2023 2022
£    £   
Amounts falling due within one year:
Trade debtors 1,665,400 152,939
Amounts recoverable on contracts 2,720,115 2,505,714
Other debtors 6,284 3,372
VAT - 290,329
4,391,799 2,952,354

Amounts falling due after more than one year:
Amounts owed by group undertakings 7,180,661 3,421,609

Aggregate amounts 11,572,460 6,373,963

A formal agreement is in place to charge interest at a commercial market rate of 2.25% above Bank of England base rate on inter-company loan balances. Inter-company loans are not repayable on demand and therefore are treated as falling due in more than one year.

10. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£    £   
Trade creditors 1,835,413 2,105,529
Social security and other taxes 81,617 67,490
VAT 321,452 -
Accruals and deferred income 2,758,379 723,216
4,996,861 2,896,235

11. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
2023 2022
£    £   
Amounts owed to group undertakings 273,064 196,490

A formal agreement is in place to charge interest at a commercial market rate of 2.25% above Bank of England base rate on inter-company loan balances. Inter-company loans are not repayable on demand and therefore are treated as falling due in more than one year.

Kelston Sparkes Contractors Limited (Registered number: 01157216)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

12. FINANCIAL INSTRUMENTS

The company has the following financial instruments:
Notes 2023 2022
£ £
Financial assets that are debt instruments measured at amortised cost
Trade debtors 9 1,665,400 152,939
Amounts owed by group undertakings 9 7,180,661 3,421,609
Amounts recoverable on contracts 9 2,720,115 2,505,714
11,566,176 6,080,262

Financial liabilities measured at amortised cost
Trade creditors 10 1,835,413 2,105,529
Amounts owed to group undertakings 11 273,064 196,490
2,108,477 2,302,019

13. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: £    £   
276,000 Ordinary £1 276,000 276,000

There is a single class of ordinary shares. There are no restrictions on the distribution of dividends and the repayment of capital.

14. RESERVES
Retained
earnings
£   

At 1 January 2023 4,024,944
Profit for the year 2,011,123
At 31 December 2023 6,036,067

15. PARENT COMPANY

Kelston Sparkes Holdings Limited is the company's parent company.

Accounts for this company may be obtained from the Registrar of Companies, Cardiff.

16. CONTINGENT LIABILITIES

The company is party to a cross company guarantee to HSBC Bank plc for Kelston Sparkes (Group) Limited, Kelston Sparkes Holdings Limited and KSG Training Services Limited which covers all assets held by these companies. These companies are controlled by the directors of Kelston Sparkes Contractors Limited.

The company has contingent liabilities at 31 December 2023 amounting to £9,532 (2022 - £1,019,706) in respect of cash held by the company which may be offset against borrowing facilities granted by the bank to its holding company and fellow subsidiaries.

At 31 December 2023 there were contingent liabilities in respect of loan and overdraft facilities granted to Kelston Sparkes (Group) Limited of £1,575,346 (2022 - £2,087,635).

Kelston Sparkes Contractors Limited (Registered number: 01157216)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2023

17. RELATED PARTY DISCLOSURES

Entities with control, joint control or significant influence over the entity
2023 2022
£    £   
Purchases 5,137,410 3,575,874
Loan interest receivable 309,993 78,436
Amount due from related party 6,642,881 3,072,163

Other related parties
2023 2022
£    £   
Purchases (199,232 ) -
Amount due to related party 284,820 -

Kelston Sparkes Commercial Limited, a company wholly owned by D Swann and K D Stark, has provided services to the company during the year.These were provided on a commercial basis and are summarised above.

18. ULTIMATE CONTROLLING PARTY

The ultimate controlling party for the Company is Mr A K Sparkes, by virtue of his 55% holding of the share capital in Kelston Sparkes Holdings Limited.