SPA_ENVIRONMENTAL_CARE_PL - Accounts


Company registration number 03281431 (England and Wales)
SPA ENVIRONMENTAL CARE PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
SPA ENVIRONMENTAL CARE PLC
COMPANY INFORMATION
Directors
Mr C P R Nicholson
Mr T G Watts
Mr N A Davis
Mr S N Bridge
(Appointed 16 August 2022)
Secretary
Mr K A Wright
Company number
03281431
Registered office
The Lairage
Bearley Road
Bearley
Stratford Upon Avon
Warwickshire
CV37 0EX
Auditor
Whitley Stimpson Limited
Penrose House
67 Hightown Road
Banbury
Oxfordshire
OX16 9BE
Bankers
Natwest Bank Plc
26 High Street
Warwick
Warwickshire
CV34 4FA
SPA ENVIRONMENTAL CARE PLC
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 25
SPA ENVIRONMENTAL CARE PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -

The directors present the strategic report for the year ended 31 December 2022.

Review of the business

As the Covid-19 pandemic eased during the year we have been able to provide our services to our valued customers. This has resulted in an increase in sales and a return to profit before tax. All of our staff have done an exceptional job, and no redundances were implemented.

 

Turnover for the year decreased to £1,653,373 leading to a pre-tax loss of £99,753.

 

Two ambulances previously purchased, and a refrigeration van have been loaned to Nord Ambulans. a Polish charity. These vehicles have been used in Poland to assist vulnerable people crossing the border fleeing the Ukrainian conflict. We are proud to support the charity and the essential humanitarian work they are performing.

 

The future has a positive outlook as many of our customers, recognising our high standards of service, have been happy to commit to a continued relationship. Our sales team have also been proactive in welcoming new clients on board.

Principal risks and uncertainties

Economic conditions

The UK is currently unprecedented levels of inflation and interest rate rises. This is in part due to the UK's withdrawal from the EU, 'Brexit', which as a result has caused grit and salt prices to substantially increase as importing cheaper supplies from the EU is no longer an option. Fuel prices have also drastically increased due to Russia's invasion of Ukraine, which has meant that the global supply of fuel has decreased causing an increase in prices.

 

We expect to be able to pass these cost increases on to our customers, however in the initial period we will have to absorb the costs which will have a significant impact on cashflow.

 

Due to inflationary pressures the Bank of England has raised interest rates; this leads to higher repayments on our loans increasing the impact on our cashflows. However, we have met each repayment and continue to service of debts in full.

 

Weather conditions

Due to global warming causing more extreme weather patterns, this has meant that it has become harder to predict colder periods of weather and winters are becoming milder. This leads to lower levels of gritting trade.

 

Going Concern

The risks and uncertainties detailed above result in a material uncertainty relating to going concern. We have paid particular attention to the going concern assessment and believe the preparation of the financial statements on a going concern basis is appropriate.

 

Forecasts have been sensitised and recent sales performance is consistent with forecasts prepared for the purposes of our going concern assessment.

 

The forecasts included a full review of the income statement, balance sheet and cashflows.

Development and performance

The position of the company at the year end is disclosed on the balance sheet.

SPA ENVIRONMENTAL CARE PLC
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
Key performance indicators

Turnover decreased by 9.1% to £1,653,373.

 

Gross profit has increased from 29.9% to 32.1% of sales.

 

Profit before taxation has decreased from 3.1% to -6.0% of sales.

Directors' statement of compliance with duty to promote the success of the Company

The directors of the company, as those of all UK companies, must act in accordance with a set of general duties. These duties are detailed in section 172 of the UK Companies Act 2006 which is summarised as follows:

 

"A director of a company must act in the way they consider, in good faith, would be most likely to promote the success of the company for benefit of its shareholders as a whole and in doing so, have regard to the likely consequences of any decisions in the long term; the interests of the company's employees; the need to foster the company's business relationships with suppliers, customers and others; the impact of the company's operations on the community and environment; the desirability of the company maintaining a reputation for high standards of business conduct; and the need to act fairly as between shareholders and the company".

 

The directors are fully aware of their responsibilities to promote the success of the company in accordance with section 172 of the Companies Act 2006. Details of how the directors have fulfilled these duties when dealing with strategic decisions are covered in the Directors' Report.

On behalf of the board

Mr T G Watts
Director
3 August 2023
SPA ENVIRONMENTAL CARE PLC
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -

The directors present their annual report and financial statements for the year ended 31 December 2022.

Principal activities

The principal activities of the company continued to be that of commercial landscape maintenance, winter gritting maintenance and pothole repair.

 

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr C P R Nicholson
Mr T G Watts
Mr N A Davis
Mr S N Bridge
(Appointed 16 August 2022)
Auditor

In accordance with the company's articles, a resolution proposing that Whitley Stimpson Limited be reappointed as auditor of the company will be put at a General Meeting.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
Mr T G Watts
Mr N A Davis
Director
Director
Mr S N Bridge
Director
3 August 2023
SPA ENVIRONMENTAL CARE PLC
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -

The directors are responsible for preparing the annual 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). 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.

SPA ENVIRONMENTAL CARE PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SPA ENVIRONMENTAL CARE PLC
- 5 -
Opinion

We have audited the financial statements of Spa Environmental Care Plc (the 'company') for the year ended 31 December 2022 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including 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 2022 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 Auditor's 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.

Material uncertainty related to going concern

We draw your attention to note 1.2 of the financial statements which discloses the company's ability to continue as a going concern, given the risks and uncertainties of the global supply position of salt and grit following the invasion of Ukraine by Russia in Spring 2022 and the impact this has had on cost inflation levels within the United Kingdom. As stated in note 1.2, these events and conditions indicate that material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

 

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.

 

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 auditor's 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

  • the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

  • the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

SPA ENVIRONMENTAL CARE PLC
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SPA ENVIRONMENTAL CARE PLC
- 6 -
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 and 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 remuneration specified by law are not made; or

  •     we have not received all the information and explanations we require for our audit; or

  •     the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the directors' report.

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our responsibility is to conduct an audit of the company’s financial statements in accordance with International Standards on Auditing (UK) and to issue an auditor’s report. However, because of the matter described in the basis for disclaimer of opinion section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.

 

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 Standards and we have fulfilled our other ethical responsibilities in accordance with these requirements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

SPA ENVIRONMENTAL CARE PLC
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SPA ENVIRONMENTAL CARE PLC
- 7 -

Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and regulations related to the risk of revenue recognition being materially misstated due to fraud, and the calculation of the management charges. We considered the extent to which non-compliance might have a material effect on the financial statements, and considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006 and tax legislation. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks related to revenue.

 

Audit procedures performed included:

  • Discussion amongst the audit team regarding the susceptibility of the client to fraud;

  • Consideration of the risk of fraud when documenting and reviewing internal controls and procedures;

  • Enquiring of management how they assess the risk of fraud, and identify and respond to the risks of fraud;

  • Enquiring of management whether they have any knowledge of actual or suspected frauds or non-compliance with laws and regulations;

  • Review of how those charged with governance exercise oversight of management's process for identifying and responding to the risk of fraud;

  • Substantive testing of revenue and debtors;

  • Review of journals for unusual items;

  • Review relevant tax correspondence;

  • Review VAT return entries and perform analytical procedures on VAT balances;

  • Substantive testing on fixed assets including having sight of the assets to confirm existence;

  • Verification of employees; and

  • Review of bank reconciliations for evidence of window dressing.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. 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 is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's 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 an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

SPA ENVIRONMENTAL CARE PLC
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SPA ENVIRONMENTAL CARE PLC
- 8 -
3 August 2023
Ian Parker
Senior Statutory Auditor
For and on behalf of Whitley Stimpson Limited
Chartered Accountants
Statutory Auditor
Penrose House
67 Hightown Road
Banbury
Oxfordshire
OX16 9BE
SPA ENVIRONMENTAL CARE PLC
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 9 -
2022
2021
Notes
£
£
Turnover
3
1,653,373
1,819,160
Cost of sales
(1,122,883)
(1,276,018)
Gross profit
530,490
543,142
Administrative expenses
(609,173)
(628,431)
Other operating income
-
0
160,259
Operating (loss)/profit
5
(78,683)
74,970
Interest receivable and similar income
9
2
-
0
Interest payable and similar expenses
10
(21,072)
(19,422)
(Loss)/profit before taxation
(99,753)
55,548
Tax on (loss)/profit
11
14,085
(41,303)
(Loss)/profit for the financial year
(85,668)
14,245
Other comprehensive income
Revaluation of tangible fixed assets
52,000
-
0
Total comprehensive income for the year
(33,668)
14,245

The profit and loss account has been prepared on the basis that all operations are continuing operations.

SPA ENVIRONMENTAL CARE PLC
BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 10 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
13
1,568,943
1,593,618
Investments
14
2
2
1,568,945
1,593,620
Current assets
Stocks
16
47,815
45,425
Debtors
17
626,425
528,868
Cash at bank and in hand
1,008
33,691
675,248
607,984
Creditors: amounts falling due within one year
18
(642,891)
(472,233)
Net current assets
32,357
135,751
Total assets less current liabilities
1,601,302
1,729,371
Creditors: amounts falling due after more than one year
19
(233,421)
(313,933)
Provisions for liabilities
Deferred tax liability
22
198,309
212,198
(198,309)
(212,198)
Net assets
1,169,572
1,203,240
Capital and reserves
Called up share capital
24
50,000
50,000
Revaluation reserve
393,986
341,986
Profit and loss reserves
725,586
811,254
Total equity
1,169,572
1,203,240
The financial statements were approved by the board of directors and authorised for issue on 3 August 2023 and are signed on its behalf by:
Mr T G Watts
Mr N A Davis
Director
Director
Mr S N Bridge
Director
Company registration number 03281431 (England and Wales)
SPA ENVIRONMENTAL CARE PLC
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 11 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2021
50,000
341,986
797,009
1,188,995
Year ended 31 December 2021:
Profit and total comprehensive income
-
-
14,245
14,245
Balance at 31 December 2021
50,000
341,986
811,254
1,203,240
Year ended 31 December 2022:
Loss
-
-
(85,668)
(85,668)
Other comprehensive income:
Revaluation of tangible fixed assets
-
52,000
-
52,000
Total comprehensive income
-
52,000
(85,668)
(33,668)
Balance at 31 December 2022
50,000
393,986
725,586
1,169,572
SPA ENVIRONMENTAL CARE PLC
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 12 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
12,161
214,389
Interest paid
(21,072)
(19,422)
Income taxes (paid)/refunded
(196)
10,072
Net cash (outflow)/inflow from operating activities
(9,107)
205,039
Investing activities
Purchase of tangible fixed assets
(42,120)
(188,413)
Proceeds from disposal of tangible fixed assets
54,388
20,400
Repayment of loans
2,654
(2,654)
Interest received
2
-
0
Net cash generated from/(used in) investing activities
14,924
(170,667)
Financing activities
Repayment of bank loans
(77,214)
(27,999)
Payment of finance leases obligations
(51,235)
(57,666)
Net cash used in financing activities
(128,449)
(85,665)
Net decrease in cash and cash equivalents
(122,632)
(51,293)
Cash and cash equivalents at beginning of year
33,691
84,984
Cash and cash equivalents at end of year
(88,941)
33,691
Relating to:
Cash at bank and in hand
1,008
33,691
Bank overdrafts included in creditors payable within one year
(89,949)
-
0
SPA ENVIRONMENTAL CARE PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 13 -
1
Accounting policies
Company information

Spa Environmental Care Plc is a private company limited by shares incorporated in England and Wales. The registered office is The Lairage, Bearley Road, Bearley, Stratford Upon Avon, Warwickshire, CV37 0EX.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.

1.2
Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

 

This is on the basis of a review of cashflow projections and the bank facilities available to company, and in the understanding of, and in the expectation that, any bank facilities currently in place will be renewed at expiry.

 

There are risks and uncertainties relating to the impact of Russia's invasion of Ukraine, 'Brexit' and the Bank of England raising interest rates, which could be considered a threat to the continued going concern status of the company. As at the date of approving these accounts the directors have assessed the impact of the aforementioned risks and uncertainties and are satisfied that these accounts continue to be prepared on a going concern basis.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

1.4
Intangible fixed assets - goodwill

Acquired goodwill is written off in equal annual instalments over its estimated useful economic life of 10 years.

SPA ENVIRONMENTAL CARE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 14 -
1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold land and buildings
Nil
Plant and equipment
10% reducing balance
Fixtures and fittings
10% reducing balance
Motor vehicles
10% reducing balance
Personalised registration plates
Nil

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 profit or loss.

1.6
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.7
Impairment of fixed assets

At each reporting period end 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). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

SPA ENVIRONMENTAL CARE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 15 -

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.8
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.9
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.10
Financial instruments

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

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

SPA ENVIRONMENTAL CARE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 16 -
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

1.11
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.12
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.13
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

SPA ENVIRONMENTAL CARE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 17 -
1.14
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.15
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

1.16
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Valuation of freehold land and buildings

As described in note 13 to the financial statements, the freehold land and buildings are stated at fair value based on the valuation performed by an independent valuer, Simon Allen & Associates Chartered Valuation Surveyors, with recent experience in the location and category of property valued. The valuer used observable market prices adjusted as necessary for any difference in the future, location or condition of the specific asset.

Valuation of personalised registration plates

As described in note 13 to the financial statements, the personalised registration plates are stated at fair value based on the valuation performed by an independent valuer, James Madden, with recent experience in the personalised number plate valuing industry. The valuer used observable market prices adjusted as necessary for differences in popularity, age and rarity of the personalised registration plates.

SPA ENVIRONMENTAL CARE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 18 -
3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Principal activities
1,653,373
1,819,160
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
1,653,373
1,819,160
2022
2021
£
£
Other revenue
Interest income
2
-
Grants received
-
38,959
4
Exceptional item
2022
2021
£
£
Income
Exceptional item - Other operating income
-
121,300

Exceptional income relates to the capitalisation of assets previously expensed to the profit and loss, which have now been recognised at fair value.

5
Operating (loss)/profit
2022
2021
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Government grants
-
(38,959)
Depreciation of owned tangible fixed assets
83,436
88,275
Loss on disposal of tangible fixed assets
1,971
1,754

During the year ended 31 December 2022, the company received government grants amounting to £0 (2021 - £38,959). This was in relation to claims made under the coronavirus job retention scheme. The company is not subject to any further conditions associated with this income.

6
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
29,944
10,650
For other services
All other non-audit services
2,026
-
0
SPA ENVIRONMENTAL CARE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 19 -
7
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2022
2021
Number
Number
Cost of sales staff
14
13
Directors
3
2
Total
17
15

Their aggregate remuneration comprised:

2022
2021
£
£
Wages and salaries
495,386
493,612
Social security costs
41,915
50,603
Pension costs
14,731
13,947
552,032
558,162
8
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
110,224
88,295
Company pension contributions to defined contribution schemes
3,307
-
113,531
88,295
9
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest on bank deposits
2
-
0
2022
2021
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
2
-
0
SPA ENVIRONMENTAL CARE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 20 -
10
Interest payable and similar expenses
2022
2021
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
12,181
8,524
Other finance costs:
Interest on finance leases and hire purchase contracts
8,791
8,215
Other interest
100
2,683
21,072
19,422
11
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
-
0
196
Adjustments in respect of prior periods
(196)
-
0
Total current tax
(196)
196
Deferred tax
Origination and reversal of timing differences
(13,889)
41,107
Total tax (credit)/charge
(14,085)
41,303

The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

2022
2021
£
£
(Loss)/profit before taxation
(99,753)
55,548
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
(18,953)
10,554
Gains not taxable
9,880
-
0
Tax effect of utilisation of tax losses not previously recognised
-
0
(3,430)
Effect of change in corporation tax rate
(3,381)
50,927
Depreciation on assets not qualifying for tax allowances
(226)
248
Enhanced capital allowances
(1,405)
(1,024)
Indexation allowance
-
0
(15,972)
Taxation (credit)/charge for the year
(14,085)
41,303
SPA ENVIRONMENTAL CARE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 21 -
12
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2022 and 31 December 2022
15,000
Amortisation and impairment
At 1 January 2022 and 31 December 2022
15,000
Carrying amount
At 31 December 2022
-
0
At 31 December 2021
-
0
13
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Personalised registration plates
Total
£
£
£
£
£
£
Cost
At 1 January 2022
700,507
1,101,553
103,421
761,685
121,300
2,788,466
Additions
-
0
13,216
10,572
39,332
-
0
63,120
Disposals
-
0
-
0
-
0
(155,852)
-
0
(155,852)
Revaluation
51,493
-
0
-
0
-
0
-
0
51,493
At 31 December 2022
752,000
1,114,769
113,993
645,165
121,300
2,747,227
Depreciation and impairment
At 1 January 2022
507
725,378
50,097
418,866
-
0
1,194,848
Depreciation charged in the year
-
0
38,939
6,281
38,216
-
0
83,436
Eliminated in respect of disposals
-
0
-
0
-
0
(99,493)
-
0
(99,493)
Revaluation
(507)
-
0
-
0
-
0
-
0
(507)
At 31 December 2022
-
0
764,317
56,378
357,589
-
0
1,178,284
Carrying amount
At 31 December 2022
752,000
350,452
57,615
287,576
121,300
1,568,943
At 31 December 2021
700,000
376,175
53,324
342,819
121,300
1,593,618

Land and buildings with a carrying amount of £752,000 (2021 - £700,000) were revalued at 31 March 2023 by Simon Allen & Associates, independent valuers not connected with the company, on the basis of market value. The directors have reviewed the value and consider it to be reflective of the value of the property at 31 December 2022.

 

Personalised registration plates with a carrying amount of £121,300 (2021 - £121,300) were valued at 23 June 2022 by James Madden an independent valuer not connected with the company, on the basis of market value. The directors have reviewed the value and consider it to be reflective of the value of the personalised registration plates at 31 December 2022.

SPA ENVIRONMENTAL CARE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 22 -
14
Fixed asset investments
2022
2021
Notes
£
£
Investments in subsidiaries
15
2
2
15
Subsidiaries

Details of the company's subsidiaries at 31 December 2022 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Gritting Dot Com Limited
3mc Middlemarch Business Park, Siskin Drive, Coventry, England, CV3 4FJ
Ordinary
100.00
Pothole.Uk.Com Limited
The Lairage, Bearley Road, Bearley, Stratford-Upon-Avon, Warwickshire, England, CV37 0TY
Ordinary
100.00
16
Stocks
2022
2021
£
£
Raw materials and consumables
47,815
45,425
17
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
621,375
510,216
Corporation tax recoverable
196
-
0
Other debtors
-
0
13,584
Prepayments and accrued income
4,854
5,068
626,425
528,868
18
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Bank loans and overdrafts
20
172,194
81,988
Obligations under finance leases
21
14,517
41,711
Trade creditors
302,955
198,931
Corporation tax
-
0
196
Other taxation and social security
68,841
108,449
Other creditors
22,831
-
0
Accruals and deferred income
61,553
40,958
642,891
472,233
SPA ENVIRONMENTAL CARE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 23 -
19
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Bank loans and overdrafts
20
213,856
291,327
Obligations under finance leases
21
19,565
22,606
233,421
313,933

The company is due to make repayments by monthly instalments after more than 5 years relating to borrowings received from National Westminster Bank plc.

20
Loans and overdrafts
2022
2021
£
£
Bank loans
296,101
373,315
Bank overdrafts
89,949
-
0
386,050
373,315
Payable within one year
172,194
81,988
Payable after one year
213,856
291,327

National Westminster Bank plc have a legal mortgage fixed charge over the freehold property and all of the fixed assets owned by the company, held as security over borrowings.

21
Finance lease obligations
2022
2021
Future minimum lease payments due under finance leases:
£
£
Within one year
18,060
47,571
In two to five years
22,929
26,812
40,989
74,383
Less: future finance charges
(6,907)
(10,066)
34,082
64,317

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

 

Net obligations under hire purchase contracts are secured by fixed charges on the assets concerned.

SPA ENVIRONMENTAL CARE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 24 -
22
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
139,804
147,717
Tax losses
(18,976)
-
Revaluations
77,481
64,481
198,309
212,198
2022
Movements in the year:
£
Liability at 1 January 2022
212,198
Credit to profit or loss
(13,889)
Liability at 31 December 2022
198,309

An increase in the UK corporation tax rate from 19% to 25%, effective from 1 April 2023, was substantially enacted on 24 May 2021. This will increase the company's future corporation tax charges accordingly. Once a timing difference has been calculated, a deferred tax asset or liability is recognised by multiplying this difference by the enacted or substantively enacted tax rate that is expected to apply when the difference reverses

23
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
14,731
13,947

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

24
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
50,000
50,000
50,000
50,000
SPA ENVIRONMENTAL CARE PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 25 -
25
Directors' transactions

Dividends totalling £0 (2021 - £0) were paid in the year in respect of shares held by the company's directors.

Chris Nicholson, the majority shareholder and director, received £5,000 (2021: £2,500) for the rent of office space during the year.

26
Cash generated from operations
2022
2021
£
£
(Loss)/profit for the year after tax
(85,668)
14,245
Adjustments for:
Taxation (credited)/charged
(14,085)
41,303
Finance costs
21,072
19,422
Investment income
(2)
-
0
Loss on disposal of tangible fixed assets
1,971
1,754
Depreciation and impairment of tangible fixed assets
83,436
88,275
Movements in working capital:
Increase in stocks
(2,390)
(32,995)
(Increase)/decrease in debtors
(100,015)
112,757
Increase/(decrease) in creditors
107,842
(30,372)
Cash generated from operations
12,161
214,389
27
Analysis of changes in net debt
1 January 2022
Cash flows
New finance leases
31 December 2022
£
£
£
£
Cash at bank and in hand
33,691
(32,683)
-
1,008
Bank overdrafts
-
0
(89,949)
-
(89,949)
33,691
(122,632)
-
0
(88,941)
Borrowings excluding overdrafts
(373,315)
77,214
-
(296,101)
Obligations under finance leases
(64,317)
51,235
(21,000)
(34,082)
(403,941)
5,817
(21,000)
(419,124)
2022-12-312022-01-01falseCCH SoftwareCCH Accounts Production 2023.200Mr C P R NicholsonMr T G WattsMr N A DavisMr S N BridgeMr K A Wright032814312022-01-012022-12-3103281431bus:Director12022-01-012022-12-3103281431bus:Director22022-01-012022-12-3103281431bus:Director32022-01-012022-12-3103281431bus:Director42022-01-012022-12-3103281431bus:CompanySecretary12022-01-012022-12-3103281431bus:RegisteredOffice2022-01-012022-12-3103281431bus:Agent12022-01-012022-12-31032814312022-12-31032814312021-01-012021-12-3103281431core:RevaluationReserve2022-01-012022-12-31032814312021-12-3103281431core:LandBuildingscore:OwnedOrFreeholdAssets2022-12-3103281431core:PlantMachinery2022-12-3103281431core:FurnitureFittings2022-12-3103281431core:MotorVehicles2022-12-3103281431core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2022-12-3103281431core:LandBuildingscore:OwnedOrFreeholdAssets2021-12-3103281431core:PlantMachinery2021-12-3103281431core:FurnitureFittings2021-12-3103281431core:MotorVehicles2021-12-3103281431core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2021-12-3103281431core:CurrentFinancialInstrumentscore:WithinOneYear2022-12-3103281431core:CurrentFinancialInstrumentscore:WithinOneYear2021-12-3103281431core:Non-currentFinancialInstrumentscore:AfterOneYear2022-12-3103281431core:Non-currentFinancialInstrumentscore:AfterOneYear2021-12-3103281431core:CurrentFinancialInstruments2022-12-3103281431core:CurrentFinancialInstruments2021-12-3103281431core:Non-currentFinancialInstruments2022-12-3103281431core:Non-currentFinancialInstruments2021-12-3103281431core:ShareCapital2022-12-3103281431core:ShareCapital2021-12-3103281431core:RevaluationReserve2022-12-3103281431core:RevaluationReserve2021-12-3103281431core:RetainedEarningsAccumulatedLosses2022-12-3103281431core:RetainedEarningsAccumulatedLosses2021-12-3103281431core:ShareCapital2020-12-3103281431core:RevaluationReserve2020-12-3103281431core:RetainedEarningsAccumulatedLosses2020-12-310328143112022-01-012022-12-310328143112021-01-012021-12-31032814312021-12-31032814312020-12-3103281431core:WithinOneYear2022-12-3103281431core:WithinOneYear2021-12-3103281431core:Goodwill2022-01-012022-12-3103281431core:LandBuildingscore:OwnedOrFreeholdAssets2022-01-012022-12-3103281431core:PlantMachinery2022-01-012022-12-3103281431core:FurnitureFittings2022-01-012022-12-3103281431core:MotorVehicles2022-01-012022-12-3103281431core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2022-01-012022-12-3103281431core:UKTax2022-01-012022-12-3103281431core:UKTax2021-01-012021-12-310328143122022-01-012022-12-310328143122021-01-012021-12-310328143132022-01-012022-12-310328143132021-01-012021-12-310328143142022-01-012022-12-310328143142021-01-012021-12-3103281431core:Goodwill2021-12-3103281431core:Goodwill2022-12-3103281431core:Goodwill2021-12-3103281431core:LandBuildingscore:OwnedOrFreeholdAssets2021-12-3103281431core:PlantMachinery2021-12-3103281431core:FurnitureFittings2021-12-3103281431core:MotorVehicles2021-12-3103281431core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2021-12-3103281431core:Subsidiary12022-01-012022-12-3103281431core:Subsidiary22022-01-012022-12-310328143112022-01-012022-12-3103281431core:BetweenTwoFiveYears2022-12-3103281431core:BetweenTwoFiveYears2021-12-3103281431bus:PrivateLimitedCompanyLtd2022-01-012022-12-3103281431bus:FRS1022022-01-012022-12-3103281431bus:Audited2022-01-012022-12-3103281431bus:FullAccounts2022-01-012022-12-31xbrli:purexbrli:sharesiso4217:GBP