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REGISTERED NUMBER: 02417996 (England and Wales)












SKELTON THOMAS ENGINEERING LIMITED

STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED

31 JANUARY 2024






SKELTON THOMAS ENGINEERING LIMITED (REGISTERED NUMBER: 02417996)






CONTENTS OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024




Page

Company Information 1

Strategic Report 2

Report of the Directors 4

Report of the Independent Auditors 5

Income Statement 8

Other Comprehensive Income 9

Statement of Financial Position 10

Statement of Changes in Equity 12

Notes to the Financial Statements 13


SKELTON THOMAS ENGINEERING LIMITED

COMPANY INFORMATION
FOR THE YEAR ENDED 31 JANUARY 2024







DIRECTORS: T F Lewis
Mrs S W Lewis



REGISTERED OFFICE: Tank Farm Road
Llandarcy
Neath
SA10 6EN



REGISTERED NUMBER: 02417996 (England and Wales)



AUDITORS: Bevan Buckland LLP
Chartered Accountants
And Statutory Auditors
Ground Floor Cardigan House
Castle Court
Swansea Enterprise Park
Swansea
SA7 9LA



BANKERS: Natwest
Phoenix Way
Llansamlet
Swansea
SA7 9FS

SKELTON THOMAS ENGINEERING LIMITED (REGISTERED NUMBER: 02417996)

STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2024

The directors present their strategic report for the year ended 31 January 2024.

Skelton Thomas Engineering Limited aspire to be the leading multi-disciplined contractor in South Wales, delivering a premium service and effective solutions to our customers.

We value our people, customers, partners and the communities in which we operate.

Our core values and behaviours underpin everything we do;

Safety
We are in a hazardous business and everything we do relies upon the safety of our workforce and the communities around us. Safe working is good business and takes priority above all.

Leadership
Our leaders have created a vision and will passionately own and drive it to completion.
Our people share our vision and work in line with our actions, beliefs, values, and goals.

Responsibility
We care about the safe management of the environment. We are committed to supporting the communities which we operate. Our people operate in an ethical manner at all times.

Excellence
We strive for excellence through systematic and disciplined management of our operations and commit to quality outcomes, having a thirst to learn, and to improve.

Discipline
We follow and uphold the rules and standards we set for our company. If something is not right, we correct it.

Collaboration
We work to a defined and common business purpose as we accomplish more together, trusting our teams and partners to deliver on our obligations and put the team ahead of personal success.

REVIEW OF BUSINESS
During the year Skelton Thomas Engineering Limited has increased its turnover by 36.46% which was in line with the projected forecasts. The Gross Profit margin saw a small increase which is representative of the highly competitive market in which we operate. During the year administrative expenses were successfully managed and resulted in a reported profit before tax of 1,114,509

The Senior Management team of Skelton Thomas Engineering Limited are constantly reviewing the risks that may impact on the group and actively take measures to minimise these as they are identified. We believe we are well placed within our sector and now have a wealth of expertise at manager level to enable us to continue to explore new avenues for additional work and attract new customers.


SKELTON THOMAS ENGINEERING LIMITED (REGISTERED NUMBER: 02417996)

STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2024

PRINCIPAL RISKS AND UNCERTAINTIES
Financial Risk
The company uses various financial instruments which include cash and other items such as trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the company's operations.

The main risk arising from the company's financial instruments are price risk, credit risk and liquidity risk. The directors review and agree policies for managing each of these risks.

Liquidity Risk
The company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitability.

Customer and Credit Risk
The company's principal financial assets are cash and trade debtors. The principal credit risk arises from its trade debtors. In order to manage credit risk the directors have implemented policies that require appropriate credit checks on potential customers before sales are made. Customers are assigned credit limits and overdue debts are chased on a regular basis.

The company is also looking to diversify to avoid customer concentration to ensure there is not a single or small group of customers that the company places significant reliance upon its sales.

Health & Safety
The business has in place a rigorous and far reaching health & safety policy, and is committed to adhering to all legislation requirements imposed on it through the various enforcing authorities.

Government Legislation
The business operates under a variety of controls and regulations implemented by government bodies. These regulations set stringent operational standards and enhance the safety and environmental characteristics of the industry. Management ensures it has sufficient, robust procedures and controls in place to remain compliant with existing legislation and to enable it to react quickly to implement any changes.

KEY PERFORMANCE INDICATORS
The main key performance indicators were as follows:

Gross Profit Margin: 2024: 9.06% (2023 8.53%)
Gross Profit: 2024 £2,041,620 (2023:1,409,199)
Net Profit Margin: 2024 3.72% (2023 2.16%)
Net Profit before Tax: 2024 £1,114,509 (2023 £453,501)
Net Profit After Tax: 2024 £838,413 (2023 £356,749)

The key performance indicators are monitored by the senior management team to ensure that they are progressing as planned in a timely manner. At this stage the senior management team is confident that these targets are being met.

ON BEHALF OF THE BOARD:





T F Lewis - Director


29 October 2024

SKELTON THOMAS ENGINEERING LIMITED (REGISTERED NUMBER: 02417996)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 JANUARY 2024

The directors present their report with the financial statements of the company for the year ended 31 January 2024.

DIVIDENDS
No interim dividend was paid during the year. The directors recommend a final dividend of £6,950 per share.

The total distribution of dividends for the year ended 31 January 2024 will be £ 695,000 .

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

T F Lewis
Mrs S W Lewis

KEY PERFORMANCE INDICATORS
The directors consider that key performance indicators are those that communicate the financial performance and strength of the company as a whole, these being turnover, gross profit, operating profit and profit/loss before taxation as set out in the financial statements profit & loss account. These give a measure of work undertaken and measure of profit generated from core operations before the impact of taxation respectively.

The directors do monitor other KPIs, however the directors choose not to include the outcomes of these KPIs in the financial statements due to the commercial sensitivity of such KPIs.

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-select suitable accounting policies and then apply them consistently;
-make judgements and accounting estimates that are reasonable and prudent;
-prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

ON BEHALF OF THE BOARD:





T F Lewis - Director


29 October 2024

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
SKELTON THOMAS ENGINEERING LIMITED

Opinion
We have audited the financial statements of Skelton Thomas Engineering Limited (the 'company') for the year ended 31 January 2024 which comprise the Income Statement, Other Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and 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 January 2024 and of its profit for the year then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

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

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

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

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

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

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

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

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
SKELTON THOMAS ENGINEERING 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:

Extent to which the audit was considered capable of detecting irregularities, including fraud
We identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, and then, design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

We discussed our audit independence complying with the Revised Ethical Standard 2019 with the engagement team members whilst planning the audit and continually monitored our independence throughout the process.

Identifying and assessing potential risks related to irregularities.
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:
- enquiring of management, including obtaining and reviewing supporting documentation, concerning the Company's policies and procedures relating to:
- identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
- detecting and responding to the risks of fraud and whether they have knowledge of any actual. suspected or alleged fraud;
- the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations;
- discussing among the engagement team how and where fraud might occur in the Financial Statements and any potential indicators of fraud. As part of this discussion, we identified potential for fraud in the following areas;
- Assumptions used for valuing work in progress at the year end, and;
- Potential for deferring income already earned at the year end.
- obtaining an understanding of the legal and regulatory frameworks that the Company operates in, focusing on those laws and regulations that had a direct effect on the Financial Statements or that had a fundamental effect on the operations of the Company, The key laws and regulations we considered in this context included the UK Companies Act and relevant tax legislation.

Audit response to risks identified
In addition to the above, our procedures to respond to risks identified included the following:
- reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with relevant laws and regulations;
- enquiring of management concerning actual and potential litigation and claims; performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
- reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and
- in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments;
- assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and
- 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.

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
SKELTON THOMAS ENGINEERING 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.




Alison Vickers (Senior Statutory Auditor)
for and on behalf of Bevan Buckland LLP
Chartered Accountants
And Statutory Auditors
Ground Floor Cardigan House
Castle Court
Swansea Enterprise Park
Swansea
SA7 9LA

29 October 2024

SKELTON THOMAS ENGINEERING LIMITED (REGISTERED NUMBER: 02417996)

INCOME STATEMENT
FOR THE YEAR ENDED 31 JANUARY 2024

2024 2023
Notes £    £   

REVENUE 22,526,990 16,507,968

Cost of sales 20,485,370 15,098,769
GROSS PROFIT 2,041,620 1,409,199

Administrative expenses 943,311 964,928
1,098,309 444,271

Other operating income 3,180 9,490
OPERATING PROFIT 4 1,101,489 453,761

Interest receivable and similar income 13,020 -
1,114,509 453,761

Interest payable and similar expenses 5 - 260
PROFIT BEFORE TAXATION 1,114,509 453,501

Tax on profit 6 276,096 96,752
PROFIT FOR THE FINANCIAL YEAR 838,413 356,749

SKELTON THOMAS ENGINEERING LIMITED (REGISTERED NUMBER: 02417996)

OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2024

2024 2023
Notes £    £   

PROFIT FOR THE YEAR 838,413 356,749


OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR

838,413

356,749

SKELTON THOMAS ENGINEERING LIMITED (REGISTERED NUMBER: 02417996)

STATEMENT OF FINANCIAL POSITION
31 JANUARY 2024

2024 2023
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 8 200,000 -
Property, plant and equipment 9 6,289 4,572
206,289 4,572

CURRENT ASSETS
Inventories 10 438,195 622,591
Debtors 11 16,717,064 10,748,737
Cash at bank and in hand 277,611 257,151
17,432,870 11,628,479
CREDITORS
Amounts falling due within one year 12 15,595,588 9,794,985
NET CURRENT ASSETS 1,837,282 1,833,494
TOTAL ASSETS LESS CURRENT
LIABILITIES

2,043,571

1,838,066

PROVISIONS FOR LIABILITIES 15 379,078 316,986
NET ASSETS 1,664,493 1,521,080

CAPITAL AND RESERVES
Called up share capital 16 10,100 10,100
Retained earnings 17 1,654,393 1,510,980
SHAREHOLDERS' FUNDS 1,664,493 1,521,080

SKELTON THOMAS ENGINEERING LIMITED (REGISTERED NUMBER: 02417996)

STATEMENT OF FINANCIAL POSITION - continued
31 JANUARY 2024



The financial statements were approved by the Board of Directors and authorised for issue on 29 October 2024 and were signed on its behalf by:





T F Lewis - Director


SKELTON THOMAS ENGINEERING LIMITED (REGISTERED NUMBER: 02417996)

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2024

Called up
share Retained Total
capital earnings equity
£    £    £   
Balance at 1 February 2022 10,100 1,529,231 1,539,331

Changes in equity
Dividends - (375,000 ) (375,000 )
Total comprehensive income - 356,749 356,749
Balance at 31 January 2023 10,100 1,510,980 1,521,080

Changes in equity
Dividends - (695,000 ) (695,000 )
Total comprehensive income - 838,413 838,413
Balance at 31 January 2024 10,100 1,654,393 1,664,493

SKELTON THOMAS ENGINEERING LIMITED (REGISTERED NUMBER: 02417996)

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024

1. STATUTORY INFORMATION

Skelton Thomas Engineering 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 (£).


2. ACCOUNTING POLICIES

Basis of preparing the financial statements
The company is both the smallest and largest undertaking of a group and as such has taken advantage of the exemption available under the Companies Act 2006 to prepare consolidated financial statements.

Financial Reporting Standard 102 - reduced disclosure exemptions
The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

the requirements of Section 7 Statement of Cash Flows.

Significant judgements and estimates
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 appropriate and reasonable in the circumstances.

a) Critical judgements in applying the company's accounting policies

The directors do not consider there to be any critical accounting judgements to the financial statements.

b) Key accounting estimates and assumptions

i) Long term contracts

Where the Company enters into long term contracts, revenue is recognised on the percentage of completion basis. Under the percentage of completion method, the Company makes an estimate of the percentage to complete for a project and recognises the proportion of revenue and profit accordingly. In forecasting the profitability of contracts, management makes best estimates of the impact of customer disputes and claims brought by contractors. Any expected losses on long term contracts are recognised immediately and are written off to the Statement of comprehensive income.

ii) Recognition of income

Turnover represents the fair value of services provided during the year under review on client assignments. Turnover is recognised as contract activity progresses and the right to consideration is earned. this represents a risk as the turnover recognised is based on an assessment of the time spent, skills and expertise provided.

Turnover
Turnover from the sale of goods is recognised in the profit and loss account when significant risks and rewards of ownership have been transferred to the buyer. Turnover from the projects or contracts is recognised as income in proportion to the stage of completion of the transaction at the balance sheet date. The stage of completion is assessed depending on the specific circumstances of each case. No turnover is recognised if there are significant uncertainties regarding recovery of the consideration due to associated costs, or there is the possibility of return of the goods. Turnover represents the sale of goods/revenue from contracts, excluding tax.

Deferred Income
Deferred income represents monies received in advance for contracts.

Goodwill
Goodwill, being the amount paid in connection with the acquisition of a business in 2024, is being amortised evenly over its estimated useful life of five years.

Intangible assets
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

SKELTON THOMAS ENGINEERING LIMITED (REGISTERED NUMBER: 02417996)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JANUARY 2024

2. ACCOUNTING POLICIES - continued

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Improvements to property - equal instalments over the lease period
Fixtures and fittings - 20% on cost
Computer equipment - 33% straight line

All categories of assets are measured using the cost method. Cost comprises the purchase price of the asset and expenditure directly attributable to the acquisition of the item.

A fixed asset is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to the income statement.

Impairment of fixed assets
At each reporting date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

Recoverable amount is the higher of fair value less costs to sell and value in use.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

SKELTON THOMAS ENGINEERING LIMITED (REGISTERED NUMBER: 02417996)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JANUARY 2024

2. ACCOUNTING POLICIES - continued

Stocks
Inventories and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in bringing inventories to their present location and condition.

Work in Progress
Work-in-progress represents the cost of services rendered and materials used on projects that have not yet reached completion. For accounting purposes, WIP is recognised as part of the company's assets until the project is invoiced or otherwise recognised as revenue.

The revenue associated with each construction project is recognised based on the percentage of completion method, whereby the revenue and costs are recognised in proportion to the work performed as at the reporting date.

Revenue from construction contracts is recognised based on the stage of completion. This is determined as the proportion of contract costs incurred for work performed to date relative to the estimated total contract costs. Revenue recognised on WIP is limited to the amount that is reasonably certain to be recoverable.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised immediately as an expense in the income statement. The amount recognised is the expected excess of costs over revenue, measured at the reporting date.

WIP is reviewed at each reporting date to ensure it remains recoverable. Any impairment loss is recognised if the carrying amount exceeds its net realisable value.

Financial instruments
The company has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS 102 to all of its financial instruments.

The company enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities such as trade and other receivables and payables, amounts due to and from related parties.

Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Debt instruments like loans and other receivables and payables are initially measured at present value of the future payments and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are measured, initially and subsequently, at the undiscounted amount of cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an outright short-term loan not at market rate, the financial asset or liability is measured, initially and subsequently, at the present value of future payments discounted at a market rate of interest for a similar debt instrument.

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 profit or loss. For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying value and the present value of estimated cash flows discounted at the assets 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 the best estimate, which is an approximation, of the amount that the group would receive for the asset if it were to be sold at the reporting date.

Financial assets and liabilities are offset and the net amount recognised 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. At each reporting date non-financial assets not carried at fair value, such as property, plant and equipment are reviewed to determine whether there is an indication that an asset may be impaired. If there is an indication of possible impairment, the recoverable amount of any asset or group of related assets, which is the higher of value in use and the fair value less costs to sell, is estimated and compared with its carrying amount. If the recoverable amount is lower, the carrying amount of the asset is reduced to its recoverable amount and an impairment loss is recognised immediately in profit or loss.

SKELTON THOMAS ENGINEERING LIMITED (REGISTERED NUMBER: 02417996)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JANUARY 2024

2. ACCOUNTING POLICIES - continued

If an impairment loss is subsequently reversed, the carrying amount of the asset or group of related assets is increased to the revised estimate of its recoverable amount, but not to exceed the amount that would have been determined had no impairment loss been recognised for the asset or group of related assets in prior periods. A reversal of an impairment loss is recognised immediately in profit or loss.

Basic financial assets
Basic financial assets, which include trade and other receivables 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.

Basic financial liabilities
Basic financial liabilities, including trade and other payables, bank loans, loans from fellow group companies are initially recognised at transaction price unless the measurement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.

Trade Debtors
Trade debtors are amounts due from customers for services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provisions for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Amounts Recoverable under contracts
Amounts recoverable under contracts represent work done at the year-end where a continuing right to receive income exists and is valued at the estimated amount recoverable in excess of fees already rendered on account.

Cash and cash equivalents
Cash at bank and cash in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.

Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments
Rentals paid under operating leases are charged to the profit and loss account on a straight line basis over the period of the lease.

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to the profit and loss account over the relevant period. The capital element of the future payments is treated as a liability.

SKELTON THOMAS ENGINEERING LIMITED (REGISTERED NUMBER: 02417996)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JANUARY 2024

2. ACCOUNTING POLICIES - continued

Pension costs and other post-retirement benefits
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Government grants
Government grants are recognised in the profit and loss account so as to match them with the expenditure towards which they are intended to contribute.

To the extent that grants are made as a contribution towards specific expenditure on fixed assets, they are recognised over the useful economic life of the related asset.

Grants made to give immediate financial support or assistance to an enterprise or to reimburse costs previously incurred are recognised in the profit and loss account of the period in which they become receivable.

Provisions for liabilities
Provisions are made when an event has taken place that gives the company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to the income statement in the year that the company becomes aware of the obligation, and are measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance Sheet.

Dilapidation Provision
Provisions are made for dilapidations, estimate for the provision is based on expected cost to restore the building to its original state.

Share Capital
Ordinary shares are classified as equity.

Dividends to equity holders
Dividends and other distributions to the company's shareholders are recognised as a liability in the financial statements in the period in which the dividend and other distributions are approved by the shareholders. These amounts are recognised in the statement of changes in equity.

3. EMPLOYEES AND DIRECTORS
2024 2023
£    £   
Wages and salaries 2,712,721 3,144,904
Social security costs 266,057 331,908
Other pension costs 76,500 131,601
3,055,278 3,608,413

The average number of employees during the year was as follows:
2024 2023

Direct Wages 52 63
Administration 6 11
58 74

2024 2023
£    £   
Directors' remuneration - 23,501

SKELTON THOMAS ENGINEERING LIMITED (REGISTERED NUMBER: 02417996)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JANUARY 2024

4. OPERATING PROFIT

The operating profit is stated after charging:

2024 2023
£    £   
Hire of plant and machinery 3,089,375 2,084,991
Vehicle Hire 281,311 125,897
Depreciation - owned assets 3,335 3,326
Auditors' remuneration 8,450 8,350
Taxation compliance services 2,200 4,500
Other assurance services 500 -
Other non- audit services 15,645 3,500

5. INTEREST PAYABLE AND SIMILAR EXPENSES
2024 2023
£    £   
Other loan interest - 260

6. TAXATION

Analysis of the tax charge
The tax charge on the profit for the year was as follows:
2024 2023
£    £   
Current tax:
UK corporation tax 284,123 92,446

Deferred tax (8,027 ) 4,306
Tax on profit 276,096 96,752

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:

2024 2023
£    £   
Profit before tax 1,114,509 453,501
Profit multiplied by the standard rate of corporation tax in the UK of 25%
(2023 - 19%)

278,627

86,165

Effects of:
Expenses not deductible for tax purposes 10,744 3,689
Adjustments to tax charge in respect of previous periods 12,366 2,592
tax purposes
in excess of depreciation
CT Marginal rates (10,810 ) -

Deferred Tax (14,277 ) 4,306
Effect of change on DT to 24% (554 ) -
Development
Total tax charge 276,096 96,752

7. DIVIDENDS
2024 2023
£    £   
Ordinary shares of £1 each
Final 695,000 375,000

SKELTON THOMAS ENGINEERING LIMITED (REGISTERED NUMBER: 02417996)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JANUARY 2024

8. INTANGIBLE FIXED ASSETS
Goodwill
£   
COST
Additions 200,000
At 31 January 2024 200,000
NET BOOK VALUE
At 31 January 2024 200,000

9. PROPERTY, PLANT AND EQUIPMENT
Improvements Fixtures
to and Computer
property fittings equipment Totals
£    £    £    £   
COST
At 1 February 2023 26,538 63,997 - 90,535
Additions - 5,052 26,767 31,819
Disposals - - (26,767 ) (26,767 )
At 31 January 2024 26,538 69,049 - 95,587
DEPRECIATION
At 1 February 2023 26,538 59,425 - 85,963
Charge for year - 3,335 - 3,335
At 31 January 2024 26,538 62,760 - 89,298
NET BOOK VALUE
At 31 January 2024 - 6,289 - 6,289
At 31 January 2023 - 4,572 - 4,572

10. INVENTORIES
2024 2023
£    £   
Stocks 170,243 243,961
Work-in-progress 267,952 378,630
438,195 622,591

11. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2024 2023
£    £   
Trade debtors 7,728,118 4,894,738
Amounts owed by group undertakings 8,034,079 5,556,954
Amounts owed by participating interests 145,638 5,054
Amounts owed by joint ventures 87,570 31
Other debtors 300,600 2,955
Amounts due from contracts 322,040 205,913
Deferred tax asset 13,134 5,107
Prepayments 85,885 77,985
16,717,064 10,748,737

SKELTON THOMAS ENGINEERING LIMITED (REGISTERED NUMBER: 02417996)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JANUARY 2024

12. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2024 2023
£    £   
Trade creditors 787,222 1,188,642
Amounts owed to group undertakings 388,717 -
Amounts owed to participating interests 7,220 171,000
Amounts owed to joint ventures 281,150 122,196
Tax 284,123 86,581
Social security and other taxes 89,852 63,868
VAT 446,957 284,348
Other creditors, accruals and
deferred income 102,158 50,180
Accruals and deferred income 13,208,189 7,828,170
15,595,588 9,794,985

13. LEASING AGREEMENTS
Operating Leases

Minimum lease payments under non-cancellable operating leases fall due as follows:

2024 2023
£ £
Within one year 96,000 96,000
Between one and five years - 96,000
96,000 192,000

14. SECURED DEBTS

The bank holds a fixed charge over the book debts and a floating charge over all other assets.

The Directors hold a fixed and floating charge over the assets of the company for monies, obligations and liabilities which now are or may at any time in the future be or become due.

15. PROVISIONS FOR LIABILITIES
2024 2023
£    £   
Other provisions 379,078 316,986

Dilapidati
Deferred -on
tax Costs
£    £   
Balance at 1 February 2023 (5,107 ) 316,987
(Credit)/charge to Income Statement during year (8,027 ) 62,092
Accelerated Capital Allowances
Balance at 31 January 2024 (13,134 ) 379,079

SKELTON THOMAS ENGINEERING LIMITED (REGISTERED NUMBER: 02417996)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JANUARY 2024

15. PROVISIONS FOR LIABILITIES - continued

The dilapidation provision relates to managements best estimates of costs under the terms of the property lease agreement. The term of the lease ends in January 2025.

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following analysis is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

20242023
Net AssetNet Asset
Balances:£   £   

ACAs1,5721,143
Other(14,707)(6,250)
(13,134)(5,107)

The deferred tax asset is recognised as it is considered probable that future taxable profits will be available against which the unused tax losses will be utilised.

16. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2024 2023
value: £    £   
10,100 Ordinary £1 10,100 10,100

17. RESERVES
Retained
earnings
£   

At 1 February 2023 1,510,980
Profit for the year 838,413
Dividends (695,000 )
At 31 January 2024 1,654,393

18. PENSION COMMITMENTS

The company operates a defined contribution pension scheme. Contributions are charges in the profit and loss account as they accrue. During the year the company paid contributions of £8,989 (2023: £3,024).

19. RELATED PARTY DISCLOSURES

The company has taken advantage of 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.

Entities with control, joint control or significant influence over the entity
2024 2023
£    £   
Sales 57,203 77,007
Purchases 8,249,962 3,868,816
Amount due from related party 233,208 293,318
Amount due to related party 288,370 5,024

20. ULTIMATE CONTROLLING PARTY

The Directors consider that there is no ultimate controlling party, as no individual, entity, or group has control over the company as defined by Section 33 of FRS 102 (Related Party Disclosures). Control is defined as the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities, and no one party meets these criteria.