Company Registration No. 06762963 (England and Wales)
SPARKOL LIMITED
UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
PAGES FOR FILING WITH REGISTRAR
SPARKOL LIMITED
CONTENTS
Page
Statement of financial position
1 - 2
Notes to the financial statements
3 - 12
SPARKOL LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2021
31 March 2021
- 1 -
2021
2020
Notes
£
£
£
£
Non-current assets
Intangible assets
3
159,667
232,281
Property, plant and equipment
4
61,764
38,330
Investments
5
1
221,431
270,612
Current assets
Trade and other receivables
6
3,941,990
3,851,964
Cash and cash equivalents
1,469,412
1,147,208
5,411,402
4,999,172
Current liabilities
7
(1,998,893)
(1,805,191)
Net current assets
3,412,509
3,193,981
Total assets less current liabilities
3,633,940
3,464,593
Provisions for liabilities - Deferred tax
(9,700)
(4,900)
Net assets
3,624,240
3,459,693
Equity
Called up share capital
9
9,000
9,000
Share premium account
690
690
Capital redemption reserve
50
50
Retained earnings
3,614,500
3,449,953
Total equity
3,624,240
3,459,693
The directors of the company have elected not to include a copy of the income statement within the financial statements.
true
For the financial year ended 31 March 2021 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
T
he member has not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476
.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
SPARKOL LIMITED
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 MARCH 2021
31 March 2021
- 2 -
The financial statements were approved by the board of directors and authorised for issue on 28 March 2022 and are signed on its behalf by:
Z A Taylor
Director
Company Registration No. 06762963
SPARKOL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
- 3 -
1
Accounting policies
Company information
Sparkol Limited is a
private
company
limited by shares
incorporated in England and Wales.
The
registered office
is Unit 1.2 Temple Studios, Temple Gate, Bristol, BS1 6QA.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
Since early 2020, the Coronavirus Disease 2019 (“COVID-19”) has spread across many countries
a
nd it
has affected the business and economic activities of the company. 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, despite the current uncertainty caused by
Covid-19. Thus the directors continue to adopt the
going concern basis of accounting in preparing the
financial statements.
1.3
Revenue
Turnover arises from the development and licensing of computer software and related services and represents amounts receivable net of VAT and trade discounts. Revenue
is recognised when the
service is performed
to the extent that it is probable that economic benefits will flow into the Company.
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated
.
1.5
Intangible fixed assets other than goodwill
In accordance with
UK GAAP,
costs of designing and producing prototype
software
for specific projects up to the stage of
commercial application
are capitalised.
The resultant fixed asset is amortised over its
estimated useful life in proportion to the projected income from the
licensing of the software at the below rates. Research expenditure is written off against profits in the year in which it is incurred.
Software development costs
20% / 33% straight line
1.6
Property, plant and equipment
Property, plant and equipment
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
SPARKOL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 4 -
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:
Website development
25% straight line
Leasehold improvements
over the term of the lease
Fixtures, fittings & equipment
25% straight line
Computer equipment
25% straight line
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
.
1.7
Non-current investments
Interests
in
fellow
subsidiaries 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
the income statement
.
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
.
1.8
Impairment of non-current 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.
SPARKOL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 5 -
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.
1.9
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 statement of financial position 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 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.
Financial assets classified as receivable within one year are not amortised.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through the statement of income
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in the statement of income.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in the statement of income.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
SPARKOL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 6 -
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.
Basic financial liabilities
Basic financial liabilities, including trade and other payables, 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
paymen
ts 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 payables
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts 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 payables are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
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 income statement 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.
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 income statement, 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.
SPARKOL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
1
Accounting policies
(Continued)
- 7 -
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
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.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
Share-based payments
Equity-settled share-based payments
,
granted to employees of the company by the company's parent company What Engages Ltd,
are measured at fair value at the date of grant by reference to the
fair value of the equity instruments granted using the Black-Scholes option pricing model. The fair value
determined at the grant date is expensed on a straight-line basis over the vesting period, based on the
estimate of shares that will eventually vest. A corresponding adjustment is made
in
equity
as a capital contribution from the parent company.
When the terms and conditions of equity-settled share-based payments at the time they were granted are
subsequently modified, the fair value of the share-based payment under the original terms and conditions
and under the modified terms and conditions are both determined at the date of the modification. Any
excess of the modified fair value over the original fair value is recognised over the remaining vesting period
in addition to the grant date fair value of the original share-based payment. The share-based payment
expense is not adjusted if the modified fair value is less than the original fair value.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an
acceleration of vesting and the amount that would have been recognised over the remaining vesting period
is recognised immediately.
1.16
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
1.17
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
SPARKOL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 8 -
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Total
34
34
3
Intangible fixed assets
Software development costs
£
Cost
At 1 April 2020 and 31 March 2021
854,850
Amortisation and impairment
At 1 April 2020
622,569
Amortisation charged for the year
72,614
At 31 March 2021
695,183
Carrying amount
At 31 March 2021
159,667
At 31 March 2020
232,281
SPARKOL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 9 -
4
Property, plant and equipment
Leasehold improvements
Plant and machinery etc
Total
£
£
£
Cost
At 1 April 2020
204,660
204,660
Additions
19,573
27,946
47,519
Disposals
(41,628)
(41,628)
At 31 March 2021
19,573
190,978
210,551
Depreciation and impairment
At 1 April 2020
166,330
166,330
Depreciation charged in the year
3,156
20,929
24,085
Eliminated in respect of disposals
(41,628)
(41,628)
At 31 March 2021
3,156
145,631
148,787
Carrying amount
At 31 March 2021
16,417
45,347
61,764
At 31 March 2020
38,330
38,330
5
Fixed asset investments
2021
2020
£
£
Investment in group undertakings
1
Movements in non-current investments
Shares in group undertakings
£
Cost or valuation
At 1 April 2020 & 31 March 2021
1
Impairment
At 1 April 2020
-
Impairment losses
1
At 31 March 2021
1
Carrying amount
At 31 March 2021
-
At 31 March 2020
1
SPARKOL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 10 -
6
Trade and other receivables
2021
2020
£
£
Amounts falling due within one year:
Trade receivables
91,799
42,805
Corporation tax recoverable
25,000
82,000
Amounts owed by group undertakings
3,714,269
3,643,066
Other receivables
110,922
84,093
3,941,990
3,851,964
7
Current liabilities
2021
2020
£
£
Trade payables
76,973
101,225
Taxation and social security
57,364
63,783
Other payables
1,864,556
1,640,183
1,998,893
1,805,191
SPARKOL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 11 -
8
Share-based payment transactions
What Engages Ltd, the company's parent company, has granted options to employees of its subsidiary undertakings to subscribe for B ordinary shares in the parent company under the terms of an approved Enterprise Management Incentive scheme. A summary of the agreed terms and conditions of the options is as follows.
Number of
Weighted
Employees
Average
Grant
Brought
Carried
at
Exercise
Date
Forward
Issued
Exercised
Forfeited
Forward
31.03.2020
Price
21.10.2019
5,512
-
-
(2,462)
3,050
22
£2.57
09.03.2021
-
4,419
-
-
4,419
6
£1.81
5,512
4,419
-
(2,462)
7,469
28
£2.12
The options vest immediately and the weighted average maximum term is 9 years. The options may only be exercised on takeover or an exit event of the parent company, or earlier at the discretion of the directors. The directors are of the opinion that no takeover, exit event or early exercise is anticipated. Accordingly, there is no share-based payment charge in respect of the above options.
9
Called up share capital
2021
2020
Ordinary share capital
£
£
Issued and fully paid
Ordinary A shares of £1 each
9,000
9,000
10
Financial commitments, guarantees and contingent liabilities
The company's parent issued a loan note of £2,000,000 on 16 April 2018. The loan note is secured by a fixed and floating charge over all the assets of the company and that of its parent. Interest on the loan note is charged at 5% per annum. The balance of the loan note at 31 March 2021 was £1,200,000 (2020: £1,600,000).
11
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2021
2020
£
£
778,010
151,343
SPARKOL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
- 12 -
12
Related party transactions
The company has taken advantage of the exemption available in accordance with Section 33.1A of
Financial Reporting Standard 102 whereby it has not disclosed transactions
entered into between two or more members of a group, as the company is a wholly owned subsidiary undertaking of the group to which it is party to the transactions.
13
Prior period adjustment
Reconciliation of changes in equity
The prior period adjustments do not give rise to any effect upon equity.
Reconciliation of changes in profit for the previous financial period
2020
£
Total adjustments
-
Profit as previously reported
346,580
Profit as adjusted
346,580
The restatement in the prior year relates to a reanalysis between cost of sales and administrative expenses and has no overall effect on profit.
2021-03-31
2020-04-01
false
29 March 2022
CCH Software
CCH Accounts Production 2021.200
No description of principal activity
Z A Taylor
J L Gibson
Z A Taylor
06762963
2020-04-01
2021-03-31
06762963
2021-03-31
06762963
2019-04-01
2020-03-31
06762963
core:DiscontinuedOperations
2019-04-01
2020-03-31
06762963
2020-03-31
06762963
core:LandBuildings
2021-03-31
06762963
core:OtherPropertyPlantEquipment
2021-03-31
06762963
core:LandBuildings
2020-03-31
06762963
core:OtherPropertyPlantEquipment
2020-03-31
06762963
core:CurrentFinancialInstruments
core:WithinOneYear
2021-03-31
06762963
core:CurrentFinancialInstruments
core:WithinOneYear
2020-03-31
06762963
core:CurrentFinancialInstruments
2021-03-31
06762963
core:CurrentFinancialInstruments
2020-03-31
06762963
core:ShareCapital
2021-03-31
06762963
core:ShareCapital
2020-03-31
06762963
core:SharePremium
2021-03-31
06762963
core:SharePremium
2020-03-31
06762963
core:CapitalRedemptionReserve
2021-03-31
06762963
core:CapitalRedemptionReserve
2020-03-31
06762963
core:RetainedEarningsAccumulatedLosses
2021-03-31
06762963
core:RetainedEarningsAccumulatedLosses
2020-03-31
06762963
bus:CompanySecretaryDirector1
2020-04-01
2021-03-31
06762963
core:IntangibleAssetsOtherThanGoodwill
2020-04-01
2021-03-31
06762963
core:LandBuildings
core:LeasedAssetsHeldAsLessee
2020-04-01
2021-03-31
06762963
core:LeaseholdImprovements
core:LeasedAssetsHeldAsLessee
2020-04-01
2021-03-31
06762963
core:FurnitureFittings
2020-04-01
2021-03-31
06762963
core:ComputerEquipment
2020-04-01
2021-03-31
06762963
core:DevelopmentCostsCapitalisedDevelopmentExpenditure
2020-03-31
06762963
core:DevelopmentCostsCapitalisedDevelopmentExpenditure
2021-03-31
06762963
core:DevelopmentCostsCapitalisedDevelopmentExpenditure
2020-04-01
2021-03-31
06762963
core:DevelopmentCostsCapitalisedDevelopmentExpenditure
2020-03-31
06762963
core:LandBuildings
2020-03-31
06762963
core:OtherPropertyPlantEquipment
2020-03-31
06762963
2020-03-31
06762963
core:LandBuildings
2020-04-01
2021-03-31
06762963
core:OtherPropertyPlantEquipment
2020-04-01
2021-03-31
06762963
bus:PrivateLimitedCompanyLtd
2020-04-01
2021-03-31
06762963
bus:SmallCompaniesRegimeForAccounts
2020-04-01
2021-03-31
06762963
bus:FRS102
2020-04-01
2021-03-31
06762963
bus:AuditExemptWithAccountantsReport
2020-04-01
2021-03-31
06762963
bus:Director1
2020-04-01
2021-03-31
06762963
bus:Director2
2020-04-01
2021-03-31
06762963
bus:CompanySecretary1
2020-04-01
2021-03-31
06762963
bus:FullAccounts
2020-04-01
2021-03-31
xbrli:pure
xbrli:shares
iso4217:GBP