Company Registration No. 03035920 (England and Wales)
KEATONS GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
LB GROUP
Number One
Vicarage Lane
Stratford
London
England
E15 4HF
KEATONS GROUP LIMITED
COMPANY INFORMATION
Directors
Mr K J Wheatley
Mr L S Verdi
Mr A B George
Mr L J Gooch
Ms D Blow
Mr R Fowler
Mr J Harvey
Ms L Lamonte
Mr O Cruikshank
R Wheatley
Mrs K K Verdi
Ms S Gooch
Ms R Bahra
Ms C George
Secretary
Mr K J Wheatley
Company number
03035920
Registered office
152-154 The Grove
Stratford
London
E15 2NS
Auditor
LB Group (Stratford)
Number One
Vicarage Lane
Stratford
London
England
E15 4HF
KEATONS GROUP LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 7
Profit and loss account
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 - 26
The following pages do not form part of the financial statements
Detailed profit and loss account
KEATONS GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 1 -

The directors present the strategic report for the year ended 31 December 2021.

 

The principal activity of the company in the period under review was that of the provision of Letting and Sales of properties through its eight offices across London.

Fair review of the business

 

During this period the company saw a strong growth in revenue due to the Sales market and the Government’s decision to reduce Stamp duty across the year. The Lettings market grew year on year due to the addition of a new income stream for a Tenancy Protection Service. With the addition of the country slowly returning to normal the Lettings market was still stabilizing and towards the last quarter rents were starting to increase or return to pre Covid-19 levels. Sales / letting revenue split was 47% / 53%.

Principal risks and uncertainties

 

Key risks to the Estate Agency Industry continue to be the stability of the Economy after Covid-19. This has impacted the industry in many ways for example energy prices increasing and affordability to rent and buy in London or the number of Lettings properties being transferred to Sales. The balance between the two sectors of the business work well and help mitigate any risks or issues that may arise. Additionally, management mitigate this risk by closely monitoring KPIs and monitoring any government information.

 

Expose to liquidity and cash flow risk

 

The company’s main financial instruments comprise of bank balances, bank loans and trade creditors. These instruments are used for the company’s operations and future investment. Additionally, to these items being short term we believe they hold very limited exposure to risk.

 

Future Developments

 

The company continues to seek growth in the Lettings sector of the business by purchasing small to medium high quality Letting books and merging them into Keatons.

Keatons continually invests in their IT infrastructure and internal process to improve and uphold an efficient business.

 

Key performance indicators

 

Revenue growth: 34% growth

Operating profit: £2,051,769

Net Profit: £1,520,172

 

On behalf of the board

Mr K J Wheatley
Director
5 August 2022
KEATONS GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -

The directors present their annual report and financial statements for the year ended 31 December 2021.

Principal activities

The principal activity of the company continued to be that of an estate agency.

Results and dividends

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £831,515. The directors do not recommend payment of a final dividend.

Directors

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

Mr K J Wheatley
Mr L S Verdi
Mr A B George
Mr L J Gooch
Ms D Blow
Mr R Fowler
Mr J Harvey
Ms L Lamonte
Mr O Cruikshank
R Wheatley
(Appointed 28 February 2021)
Mrs K K Verdi
(Appointed 27 February 2021)
Ms S Gooch
(Appointed 28 February 2021)
Ms R Bahra
Ms C George
(Appointed 28 February 2021)
Auditor

The auditor, LB Group (Stratford), is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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 K J Wheatley
Director
5 August 2022
KEATONS GROUP LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 3 -

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:

 

 

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.

KEATONS GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF KEATONS GROUP LIMITED
- 4 -
Opinion

We have audited the financial statements of Keatons Group Limited (the 'company') for the year ended 31 December 2021 which comprise the profit and loss account, 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:

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.

Conclusions relating to going concern

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

 

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

 

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our 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:

KEATONS GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KEATONS GROUP LIMITED
- 5 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

 

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 objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

KEATONS GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KEATONS GROUP LIMITED
- 6 -

The extent to which the audit was considered capable of detecting irregularities including fraud

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

 

•    the engagement partner ensured that the engagement team collectively had the appropriate     competence, capabilities and skills to identify or recognise non-compliance with applicable laws and    regulations;

•    we identified the laws and regulations applicable to the company through discussions with directors and    other management, and from our commercial knowledge and experience of the estate agency sector;

•    we focused on specific laws and regulations which we considered may have a direct material effect on    the financial statements or the operations of the company, including the Companies Act 2006, taxation    legislation, data protection, anti-bribery, environmental and health and safety legislation;

•    we assessed the extent of compliance with the laws and regulations identified above through making    enquiries of management and inspecting legal correspondence; and

•    identified laws and regulations were communicated within the audit team regularly and the team     remained alert to instances of non-compliance throughout the audit.

 

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

 

•    making enquiries of management as to where they considered there was susceptibility to fraud, their     knowledge of actual, suspected and alleged fraud.

•    considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and    regulations.

 

To address the risk of fraud through management bias and override of controls, we:

 

•    performed analytical procedures to identify any unusual or unexpected relationships;

•    tested journal entries to identify unusual transactions including dates in which they were posted;

•    assessed whether judgements and assumptions made in determining the accounting estimates were    indicative of potential bias; and

•    investigated the rationale behind significant or unusual transactions.

 

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

 

•    agreeing financial statement disclosures to underlying supporting documentation;

•    enquiring of management as to actual and potential litigation and claims; and

•    reviewing correspondence with the the company’s legal advisors.

 

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of directors and other management and the inspection of regulatory and legal correspondence, if any.

 

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or 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.

Other matters which we are required to address

In accordance with ISA 710, the prior year Financial Statements for the year ended 31 December 2019 were unaudited.

KEATONS GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KEATONS GROUP LIMITED
- 7 -

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.

Senior statutory auditor exemption

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Shaun Roberts (Senior Statutory Auditor)
For and on behalf of LB Group Limited
5 August 2022
Chartered Accountants
Statutory Auditor
The Octagon
Suite E2, 2nd Floor
Middleborough
Colchester
England
CO1 1TG
KEATONS GROUP LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 8 -
2021
2020
Notes
£
£
Turnover
3
9,843,243
7,317,357
Administrative expenses
(7,799,087)
(6,979,086)
Other operating income
7,613
483,249
Operating profit
4
2,051,769
821,520
Interest receivable and similar income
8
564
11,151
Interest payable and similar expenses
9
(14,956)
(7,608)
Profit before taxation
2,037,377
825,063
Tax on profit
10
(517,205)
(296,846)
Profit for the financial year
1,520,172
528,217

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

KEATONS GROUP LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
- 9 -
2021
2020
£
£
Profit for the year
1,520,172
528,217
Other comprehensive income
-
-
Total comprehensive income for the year
1,520,172
528,217
KEATONS GROUP LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2021
31 December 2021
- 10 -
2021
2020
Notes
£
£
£
£
Fixed assets
Goodwill
12
830,048
1,345,157
Tangible assets
13
585,560
719,639
Investments
14
798,006
1,024,280
2,213,614
3,089,076
Current assets
Debtors
17
871,378
912,501
Cash at bank and in hand
2,337,884
1,561,975
3,209,262
2,474,476
Creditors: amounts falling due within one year
18
(1,450,850)
(1,907,155)
Net current assets
1,758,412
567,321
Total assets less current liabilities
3,972,026
3,656,397
Creditors: amounts falling due after more than one year
19
(403,003)
(782,762)
Provisions for liabilities
Deferred tax liability
22
42,800
36,200
(42,800)
(36,200)
Net assets
3,526,223
2,837,435
Capital and reserves
Called up share capital
24
252
121
Profit and loss reserves
3,525,971
2,837,314
Total equity
3,526,223
2,837,435
The financial statements were approved by the board of directors and authorised for issue on 5 August 2022 and are signed on its behalf by:
Mr K J Wheatley
Director
Company Registration No. 03035920
KEATONS GROUP LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2020
121
2,684,097
2,684,218
Year ended 31 December 2020:
Profit and total comprehensive income for the year
-
528,217
528,217
Dividends
11
-
(375,000)
(375,000)
Balance at 31 December 2020
121
2,837,314
2,837,435
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
1,520,172
1,520,172
Issue of share capital
24
131
-
131
Dividends
11
-
(831,515)
(831,515)
Balance at 31 December 2021
252
3,525,971
3,526,223
KEATONS GROUP LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 12 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
2,381,932
1,057,109
Interest paid
(14,956)
(7,608)
Income taxes paid
(580,509)
(202,341)
Net cash inflow from operating activities
1,786,467
847,160
Investing activities
Purchase of tangible fixed assets
(27,685)
(40,995)
Proceeds on disposal of tangible fixed assets
1,379
-
0
Loans made
-
0
(15,000)
Receipts arising from loans made
5,631
-
Interest received
564
11,151
Net cash used in investing activities
(20,111)
(44,844)
Financing activities
Movement in bank loans
-
0
543,741
Repayment of bank loans
(162,283)
-
Payment of finance leases obligations
3,351
(7,872)
Dividends paid
(831,515)
(375,000)
Net cash (used in)/generated from financing activities
(990,447)
160,869
Net increase in cash and cash equivalents
775,909
963,185
Cash and cash equivalents at beginning of year
1,561,975
598,790
Cash and cash equivalents at end of year
2,337,884
1,561,975
KEATONS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 13 -
1
Accounting policies
Company information

Keatons Group Limited is a private company limited by shares incorporated in England and Wales. The registered office is 152-154 The Grove, Stratford, London, E15 2NS.

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. The principal accounting policies adopted are set out below.

1.2
Going concern

Atruet 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.

1.3
Turnover

Turnover represents amounts receivable for services provided net of VAT. Revenue in respect of commissions due on house sales is recognised at the point of the relevant property sale having been exchanged. Revenue in respect of commissions due on lettings and property management is recognised in the period to which the service relates.

1.4
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life of 5 years.

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:

Leasehold land and buildings
on a straight line basis over the term of the lease
Plant and machinery
25% reducing balance
Fixtures and fittings
20% reducing balance
Motor vehicles
4 years 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 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.

KEATONS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 14 -

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.

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
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.

1.9
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.

KEATONS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 15 -
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.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, 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 profit or loss.

 

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 profit or loss.

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.

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 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.

KEATONS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 16 -
Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
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.

1.11
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.

KEATONS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 17 -
1.12
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.

1.13
Retirement benefits

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

1.14
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.

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 leases asset are consumed.

1.15
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.

KEATONS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 18 -
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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Investments and Goodwill

Within the financial statements, the value of both goodwill and investments has significant judgement from the management in arriving at the valuation.

 

Annual income from properties retained from the initial transactions is calculated using best estimates and applied for the remaining life of the balance. This is then compared to the value in the accounts to ensure it is reasonable. A best estimate is used for older transactions where a retained list of properties is not available.

3
Turnover and other revenue
2021
2020
£
£
Turnover analysed by class of business
Sales & Lettings
9,843,243
7,317,357
2021
2020
£
£
Turnover analysed by geographical market
United Kingdom
9,843,243
7,317,357
2021
2020
£
£
Other revenue
Interest income
564
11,151
Grants received
7,613
483,249
4
Operating profit
2021
2020
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(7,613)
(483,249)
Depreciation of owned tangible fixed assets
160,385
177,385
Amortisation of intangible assets
448,386
448,386
Operating lease charges
499,295
495,809
KEATONS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 19 -
5
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
21,500
-
0
6
Employees

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

2021
2020
Number
Number
99
79

Their aggregate remuneration comprised:

2021
2020
£
£
Wages and salaries
4,281,964
3,955,592
Social security costs
382,885
431,062
Pension costs
195,706
74,506
4,860,555
4,461,160
7
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
801,474
987,291
Company pension contributions to defined contribution schemes
108,517
15,298
909,991
1,002,589
Remuneration disclosed above include the following amounts paid to the highest paid director:
2021
2020
£
£
Remuneration for qualifying services
152,044
144,813
KEATONS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 20 -
8
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
564
11,151

Investment income includes the following:

Interest on financial assets not measured at fair value through profit or loss
564
11,151
9
Interest payable and similar expenses
2021
2020
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
12,533
7,258
Other finance costs:
Interest on finance leases and hire purchase contracts
2,423
350
14,956
7,608
10
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
508,597
281,630
Adjustments in respect of prior periods
2,008
-
0
Total current tax
510,605
281,630
Deferred tax
Origination and reversal of timing differences
6,600
15,216
Total tax charge
517,205
296,846
KEATONS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
10
Taxation
(Continued)
- 21 -

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

2021
2020
£
£
Profit before taxation
2,037,377
825,063
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
387,102
156,762
Tax effect of expenses that are not deductible in determining taxable profit
99,281
9,807
Permanent capital allowances in excess of depreciation
(8,138)
(10,147)
Depreciation on assets not qualifying for tax allowances
30,474
118,896
Under/(over) provided in prior years
2,007
-
0
Deferred tax adjustments in respect of prior years
6,600
15,217
Pensions
(121)
(73)
Non loan related debits
-
0
6,384
Taxation charge for the year
517,205
296,846
11
Dividends
2021
2020
£
£
Interim paid
831,515
375,000
12
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2021
2,241,929
Revaluation
(66,723)
At 31 December 2021
2,175,206
Amortisation and impairment
At 1 January 2021
896,772
Amortisation charged for the year
448,386
At 31 December 2021
1,345,158
Carrying amount
At 31 December 2021
830,048
At 31 December 2020
1,345,157
KEATONS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 22 -
13
Tangible fixed assets
Leasehold land and buildings
Plant and machinery
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2021
1,156,094
175,866
521,495
199,704
2,053,159
Additions
3,759
14,325
9,601
-
0
27,685
Disposals
-
0
(5,185)
-
0
-
0
(5,185)
At 31 December 2021
1,159,853
185,006
531,096
199,704
2,075,659
Depreciation and impairment
At 1 January 2021
627,115
129,216
377,878
199,311
1,333,520
Depreciation charged in the year
119,029
10,938
30,418
-
0
160,385
Eliminated in respect of disposals
-
0
(3,806)
-
0
-
0
(3,806)
At 31 December 2021
746,144
136,348
408,296
199,311
1,490,099
Carrying amount
At 31 December 2021
413,709
48,658
122,800
393
585,560
At 31 December 2020
528,979
46,650
143,617
393
719,639
14
Fixed asset investments
2021
2020
Notes
£
£
Investments in subsidiaries
15
798,006
1,024,280
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 January 2021
1,024,280
Valuation changes
(226,274)
At 31 December 2021
798,006
Carrying amount
At 31 December 2021
798,006
At 31 December 2020
1,024,280

During the year, the value of the fixed asset investment was impaired by £226,274 in relation to earnouts which will not materialize.

KEATONS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 23 -
15
Subsidiaries

Details of the company's subsidiaries at 31 December 2021 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
J&D Property Rentals Ltd
152-154 The Grove, London, England, E15 1NS
Ordinary
100.00
Royal Docks Property Services (London) Limited
152-154 The Grove, London, England, E15 1NS
Ordinary
100.00
16
Financial instruments
2021
2020
£
£
17
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
353,233
467,953
Corporation tax recoverable
3,045
-
0
Other debtors
60,426
61,189
Prepayments and accrued income
440,974
383,359
857,678
912,501
2021
2020
Amounts falling due after more than one year:
£
£
Prepayments and accrued income
13,700
-
0
Total debtors
871,378
912,501
18
Creditors: amounts falling due within one year
2021
2020
Notes
£
£
Bank loans
20
226,347
181,871
Obligations under finance leases
21
2,975
(376)
Trade creditors
78,606
92,423
Amounts owed to group undertakings
-
0
5,000
Corporation tax
212,763
279,622
Other taxation and social security
572,014
881,194
Other creditors
14,311
14,944
Accruals and deferred income
343,834
452,477
1,450,850
1,907,155
KEATONS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 24 -
19
Creditors: amounts falling due after more than one year
2021
2020
Notes
£
£
Bank loans and overdrafts
20
403,003
609,762
Accruals and deferred income
-
0
173,000
403,003
782,762
20
Loans and overdrafts
2021
2020
£
£
Bank loans
629,350
791,633
Payable within one year
226,347
181,871
Payable after one year
403,003
609,762

Part of the bank loan is secured by fixed and floating charges over the assets of the company by Barclays Bank PLC. The loan is also guaranteed by two of the directors, Mr K Wheatley & Mr L Verdi personally for a total of £660,735.

21
Finance lease obligations
2021
2020
Future minimum lease payments due under finance leases:
£
£
Within one year
2,975
(376)

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.

22
Deferred taxation

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

Liabilities
Liabilities
2021
2020
Balances:
£
£
Accelerated capital allowances
42,800
36,200
KEATONS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
22
Deferred taxation
(Continued)
- 25 -
2021
Movements in the year:
£
Liability at 1 January 2021
36,200
Charge to profit or loss
6,600
Liability at 31 December 2021
42,800
23
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
195,706
74,506

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
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of 1p each
25,151
12,100
252
121

On 28 February 2021 there was a transfer of shares in class ordinary A, B, C & D. There was an issue of shares at a par value of £0.01 per share on the same day.

25
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2021
2020
£
£
Within one year
3,004,375
3,491,083
26
Related party transactions

At the balance sheet date the company owed £nil (2020: £5,000) to Elizabeth Pryce Limited.

 

At the balance sheet date the company was owed £nil (2020: £5,700) and £nil (2020: £126) from J&D Property Rentals Limited and Royal Docks Property Services (London) Limited respectively.

 

As at the balance sheet date, director Mr L Gooch owed £9,369 (2020: £15,000) to the company. This was interest free and repayable on demand.

KEATONS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 26 -
27
Cash generated from operations
2021
2020
£
£
Profit for the year after tax
1,520,172
528,217
Adjustments for:
Taxation charged
517,205
296,846
Finance costs
14,956
7,608
Investment income
(564)
(11,151)
Shares issued not yet paid
131
-
0
Amortisation and impairment of intangible assets
448,386
448,386
Depreciation and impairment of tangible fixed assets
160,385
177,386
Impairment of subsidiary
226,674
(774,280)
Movements in working capital:
Decrease/(increase) in debtors
38,537
(214,644)
(Decrease)/increase in creditors
(543,950)
598,741
Cash generated from operations
2,381,932
1,057,109
28
Analysis of changes in net funds
1 January 2021
Cash flows
31 December 2021
£
£
£
Cash at bank and in hand
1,561,975
775,909
2,337,884
Borrowings excluding overdrafts
(791,633)
162,283
(629,350)
Obligations under finance leases
376
(3,351)
(2,975)
770,718
934,841
1,705,559
2021-12-312021-01-01falseCCH SoftwareCCH Accounts Production 2022.200Mr L S VerdiMr A B GeorgeMr L J GoochMs D BlowMr R FowlerMr J HarveyMs L LamonteMr O CruikshankR WheatleyMrs K K VerdiMs S GoochMs R BahraMs C GeorgeC GeorgeMr K J Wheatley030359202021-01-012021-12-3103035920bus:CompanySecretaryDirector12021-01-012021-12-3103035920bus:Director12021-01-012021-12-3103035920bus:Director22021-01-012021-12-3103035920bus:Director32021-01-012021-12-3103035920bus:Director42021-01-012021-12-3103035920bus:Director52021-01-012021-12-3103035920bus:Director62021-01-012021-12-3103035920bus:Director72021-01-012021-12-3103035920bus:Director82021-01-012021-12-3103035920bus:Director92021-01-012021-12-3103035920bus:Director102021-01-012021-12-3103035920bus:Director112021-01-012021-12-3103035920bus:Director122021-01-012021-12-3103035920bus:Director132021-01-012021-12-3103035920bus:CompanySecretary12021-01-012021-12-3103035920bus:Director142021-01-012021-12-3103035920bus:RegisteredOffice2021-01-012021-12-31030359202021-12-31030359202020-01-012020-12-3103035920core:RetainedEarningsAccumulatedLosses2020-01-012020-12-3103035920core:RetainedEarningsAccumulatedLosses2021-01-012021-12-3103035920core:Goodwill2021-12-3103035920core:Goodwill2020-12-31030359202020-12-3103035920core:LandBuildingscore:LeasedAssetsHeldAsLessee2021-12-3103035920core:PlantMachinery2021-12-3103035920core:FurnitureFittings2021-12-3103035920core:MotorVehicles2021-12-3103035920core:LandBuildingscore:LeasedAssetsHeldAsLessee2020-12-3103035920core:PlantMachinery2020-12-3103035920core:FurnitureFittings2020-12-3103035920core:MotorVehicles2020-12-3103035920core:CurrentFinancialInstrumentscore:WithinOneYear2021-12-3103035920core:CurrentFinancialInstrumentscore:WithinOneYear2020-12-3103035920core:Non-currentFinancialInstrumentscore:AfterOneYear2021-12-3103035920core:Non-currentFinancialInstrumentscore:AfterOneYear2020-12-3103035920core:CurrentFinancialInstruments2021-12-3103035920core:CurrentFinancialInstruments2020-12-3103035920core:Non-currentFinancialInstruments2021-12-3103035920core:Non-currentFinancialInstruments2020-12-3103035920core:ShareCapital2021-12-3103035920core:ShareCapital2020-12-3103035920core:RetainedEarningsAccumulatedLosses2021-12-3103035920core:RetainedEarningsAccumulatedLosses2020-12-3103035920core:ShareCapital2019-12-3103035920core:RetainedEarningsAccumulatedLosses2019-12-31030359202019-12-3103035920core:ShareCapital2021-01-012021-12-310303592012021-01-012021-12-310303592022021-01-012021-12-31030359202020-12-3103035920core:Goodwill2021-01-012021-12-3103035920core:LandBuildingscore:LongLeaseholdAssets2021-01-012021-12-3103035920core:PlantMachinery2021-01-012021-12-3103035920core:FurnitureFittings2021-01-012021-12-3103035920core:MotorVehicles2021-01-012021-12-3103035920core:UKTax2021-01-012021-12-3103035920core:UKTax2020-01-012020-12-310303592012020-01-012020-12-310303592022020-01-012020-12-310303592032021-01-012021-12-310303592032020-01-012020-12-310303592042021-01-012021-12-310303592042020-01-012020-12-3103035920core:Goodwill2020-12-3103035920core:ComputerSoftware2021-01-012021-12-3103035920core:LandBuildingscore:LeasedAssetsHeldAsLessee2020-12-3103035920core:PlantMachinery2020-12-3103035920core:FurnitureFittings2020-12-3103035920core:MotorVehicles2020-12-3103035920core:LandBuildingscore:LeasedAssetsHeldAsLessee2021-01-012021-12-3103035920core:Subsidiary12021-01-012021-12-3103035920core:Subsidiary22021-01-012021-12-3103035920core:Subsidiary112021-01-012021-12-3103035920core:Subsidiary222021-01-012021-12-3103035920core:WithinOneYear2021-12-3103035920core:WithinOneYear2020-12-3103035920bus:PrivateLimitedCompanyLtd2021-01-012021-12-3103035920bus:FRS1022021-01-012021-12-3103035920bus:Audited2021-01-012021-12-3103035920bus:FullAccounts2021-01-012021-12-31xbrli:purexbrli:sharesiso4217:GBP