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REGISTERED NUMBER: 06202392 (England and Wales)















STRATEGIC REPORT, REPORT OF THE DIRECTOR AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 JULY 2023

FOR

KPH DE-CONSTRUCTION SERVICES LTD

KPH DE-CONSTRUCTION SERVICES LTD (REGISTERED NUMBER: 06202392)

CONTENTS OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023










Page

Company Information 1

Strategic Report 2

Report of the Director 4

Report of the Independent Auditors 6

Income Statement 9

Balance Sheet 10

Statement of Changes in Equity 11

Cash Flow Statement 12

Notes to the Financial Statements 13


KPH DE-CONSTRUCTION SERVICES LTD

COMPANY INFORMATION
FOR THE YEAR ENDED 31 JULY 2023







DIRECTOR: K J Potter





SECRETARY: L West





REGISTERED OFFICE: Unit 1 Paddock Barn Farm
Godstone Road
Caterham
CR3 6SF





REGISTERED NUMBER: 06202392 (England and Wales)





AUDITORS: Lewis Brownlee (Chichester) Limited
Chartered Accountants
Statutory Auditors
Appledram Barns
Birdham Road
Chichester
West Sussex
PO20 7EQ

KPH DE-CONSTRUCTION SERVICES LTD (REGISTERED NUMBER: 06202392)

STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2023


The director presents his strategic report for the year ended 31 July 2023.

FAIR REVIEW OF BUSINESS
We are pleased to report the financial year, which shows an improvement in terms of revenues, profits, and net assets of the business.

The construction industry in general continued to be challenging throughout 2023 but the company seized many opportunities that arose during the year, which in turn has increased the company market share within the sector. The space in which the company operates continued to be buoyant and new opportunities continued to present themselves. Relationships with existing and new clients continued to be forged and developed through the year. Credit risk within the industry was a concern, and therefore the business continued to adapt and develop its management of this risk.

The company's range of services to the sector remained focused and adaptable. The business continued to refine existing technical and operation manuals. The refinement of all IT systems were exploited throughout the year and this has allowed the business to improve it's capacity whilst maintaining it's focus of profitability.

Overall, the board were pleased with the revenue achieved in the year (£25.2m), which is a £9.1m increase from 2022. The board remains focused around profitability and continues to adjudicate all tenders to ensure that any submission fits within the company risk parameters.

Gross margins continued to remain strong, and whilst they are reduced from 2022, the board are pleased with the overall position. The board note the continued drive for efficiencies and the control and monitoring of gross margins remain a core focus whilst maintaining impeccable project delivery.

The company has seen a growth in overheads this year, increasing to £3.2m from £2.8m in 2022.

PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks of the business lie within the construction industry, the cost and availability of labour, together with the risks associated with the day-to-day operations on site and the delivery of projects. Financial risks remain within the marketplace which place a risk from a financial perspective (credit risk) which in turn might place a risk on the commercial delivery of a project.

The company continually monitors the financial and operational risk noted and this remains a key focus of the company. The business continues to carry out credit checks on all customers and key suppliers to ensure financial, and operational stability. The business continually monitors its credit control procedures, and this is communicated throughout the business to ensure that no unnecessary exposure is endured.

The business has several strategic supplier relationships to service the two main areas of supply - being labour provision and waste management. The company continually monitor the performance and delivery of said partners and remains receptive to new supply chains entering the marketplace. The business has successfully implemented and embedded IT systems into these partners to further create efficiencies and identify deficiencies.

Health and safety risks continue to be measured and monitored by the Health and Safety management team. The provision of new IT systems, business processes and procedures also support this function and safeguards have been put in place to ensure that the function remains robust and continually monitored.


KPH DE-CONSTRUCTION SERVICES LTD (REGISTERED NUMBER: 06202392)

STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2023

KEY PERFORMANCE INDICATORS
For the year-ended 31 July 2023 revenues were £25,712,614 (2022 - £16,082,588) with underlying profits before tax of £2,729,424 (2022 - £1,751,701) and the board considered the results to be in line with its expectations.

- Turnover increased by £9.1m (57%) from 2022
- Gross profits increased by £1.4m (30%) from 2022
- Net profit before tax increased £977,723 (56%) from 2022
- Zero reportable RIDDOR incidents throughout 2023 (2022: zero)

ON BEHALF OF THE BOARD:





K J Potter - Director


24 April 2024

KPH DE-CONSTRUCTION SERVICES LTD (REGISTERED NUMBER: 06202392)

REPORT OF THE DIRECTOR
FOR THE YEAR ENDED 31 JULY 2023


The director presents his report with the financial statements of the company for the year ended 31 July 2023.

PRINCIPAL ACTIVITY
The principal activity of the company is that of Interior Soft Strip, Structural Alteration and Internal Demolition.

DIVIDENDS
During the year dividends of £NIL (2022 - £48,000) were paid.

CASH CONTRIBUTION
During the year a cash contribution of £NIL (2022 - £4,500,100) (as part consideration) was made to a Employee Ownership Trust, where KpH Group EOT Trustees Limited holds, as nominee only, 75% of the share capital of KpH Group Limited which was previously held by, or beneficially held by, the director. The remaining consideration of £12,500,000 will be funded by future cash contributions to be made from the company in accordance with the terms of the Trust Deed and related agreements and on the approval of the Trustees.

RESEARCH AND DEVELOPMENT
The company undertook research and development activities amounting to £47,027 (2022 - £342,140) in the year.

The business undertook research and development activities to develop new methodology on it's projects, which was successfully implemented on-site, and significantly improved the protection of environmental effects, by enhancing the contamination of the surroundings from noise, dust, and debris.

FUTURE DEVELOPMENTS
The business continues to advance within the industry it operates and where improvements can be adopted and implemented into the current working practices this is achieved. The business continually strives for excellence and believes through its technological development that this is achievable. In turn this should bolster the company position within the marketplace.

DIRECTOR
K J Potter held office during the whole of the period from 1 August 2022 to the date of this report.

FINANCIAL INSTRUMENTS
The company has a normal level of exposure to price, credit, liquidity and cash flow risks arising from trading activities which are conducted in sterling. The company does not enter into any formally designated hedging arrangements.

DONATIONS
The company paid charitable donations of £2,524 in the year (2022 - £1,691).

DIRECTORS' INDEMNITIES
The company has made qualifying third party indemnity provisions for the benefit of its director which were made during the year and remain in force at the date of this report.

DIRECTOR'S RESPONSIBILITIES STATEMENT
The director is responsible for preparing the Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is 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.


KPH DE-CONSTRUCTION SERVICES LTD (REGISTERED NUMBER: 06202392)

REPORT OF THE DIRECTOR
FOR THE YEAR ENDED 31 JULY 2023

DIRECTOR'S RESPONSIBILITIES STATEMENT - continued
The director is 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 him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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

AUDITORS
The auditors, Lewis Brownlee (Chichester) Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:





K J Potter - Director


24 April 2024

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
KPH DE-CONSTRUCTION SERVICES LTD


Opinion
We have audited the financial statements of KpH De-Construction Services Ltd (the 'company') for the year ended 31 July 2023 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:
-give a true and fair view of the state of the company's affairs as at 31 July 2023 and of its profit for the year then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

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

Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's 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 director 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 director is 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 the audit:
- the information given in the Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
KPH DE-CONSTRUCTION SERVICES LTD


Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Director.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of director's remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.

Responsibilities of director
As explained more fully in the Director's Responsibilities Statement set out on pages four and five, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

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 the director and other
management, and from our commercial knowledge and experience of the 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 legislation such as the Companies Act 2006, taxation
legislation and the Health and Safety at Work Act;
- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of
management and inspecting legal correspondence, where applicable; 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; and
- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
KPH DE-CONSTRUCTION SERVICES LTD


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;
- assessed whether judgements and assumptions made in determining the accounting estimates set out in the
accounting policies 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;
- reading the minutes of meetings of those charged with governance, where applicable;
- enquiring of management as to actual and potential litigation and claims; and
- reviewing correspondence with HMRC, relevant regulators and the company’s legal advisors, where applicable.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.




Sam Ede BFP FCA FCCA (Senior Statutory Auditor)
for and on behalf of Lewis Brownlee (Chichester) Limited
Chartered Accountants
Statutory Auditors
Appledram Barns
Birdham Road
Chichester
West Sussex
PO20 7EQ

24 April 2024

KPH DE-CONSTRUCTION SERVICES LTD (REGISTERED NUMBER: 06202392)

INCOME STATEMENT
FOR THE YEAR ENDED 31 JULY 2023

2023 2022
Notes £ £

TURNOVER 4 25,217,614 16,082,588

Cost of sales 19,348,730 11,585,263
GROSS PROFIT 5,868,884 4,497,325

Administrative expenses 3,150,782 2,752,672
2,718,102 1,744,653

Other operating income 4,550 -
OPERATING PROFIT 6 2,722,652 1,744,653

Interest receivable and similar income 9,314 7,048
2,731,966 1,751,701

Interest payable and similar expenses 8 2,542 -
PROFIT BEFORE TAXATION 2,729,424 1,751,701

Tax on profit 9 619,196 309,950
PROFIT FOR THE FINANCIAL YEAR 2,110,228 1,441,751

KPH DE-CONSTRUCTION SERVICES LTD (REGISTERED NUMBER: 06202392)

BALANCE SHEET
31 JULY 2023

2023 2022
Notes £ £ £ £
FIXED ASSETS
Tangible assets 11 184,029 164,048

CURRENT ASSETS
Stocks 12 488,662 305,870
Debtors 13 7,707,545 3,979,375
Cash at bank and in hand 3,924,189 1,440,658
12,120,396 5,725,903
CREDITORS
Amounts falling due within one year 14 5,894,381 1,802,687
NET CURRENT ASSETS 6,226,015 3,923,216
TOTAL ASSETS LESS CURRENT
LIABILITIES

6,410,044

4,087,264

CREDITORS
Amounts falling due after more than one year 15 (276,437 ) (69,109 )

PROVISIONS FOR LIABILITIES 17 (45,791 ) (40,567 )
NET ASSETS 6,087,816 3,977,588

CAPITAL AND RESERVES
Called up share capital 18 10 10
Profit and loss account 6,087,806 3,977,578
SHAREHOLDERS' FUNDS 6,087,816 3,977,588

The financial statements were approved by the director and authorised for issue on 24 April 2024 and were signed by:





K J Potter - Director


KPH DE-CONSTRUCTION SERVICES LTD (REGISTERED NUMBER: 06202392)

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2023

Called up Profit and
share loss Total
capital account equity
£ £ £
Balance at 1 August 2021 10 7,083,927 7,083,937

Changes in equity
Cash contribution - (4,500,100 ) (4,500,100 )
Dividends - (48,000 ) (48,000 )
Total comprehensive income - 1,441,751 1,441,751
Balance at 31 July 2022 10 3,977,578 3,977,588

Changes in equity
Total comprehensive income - 2,110,228 2,110,228
Balance at 31 July 2023 10 6,087,806 6,087,816

KPH DE-CONSTRUCTION SERVICES LTD (REGISTERED NUMBER: 06202392)

CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 JULY 2023

2023 2022
Notes £ £
Cash flows from operating activities
Cash generated from operations 22 1,726,419 1,112,364
Interest paid (2,542 ) -
Tax paid (357,458 ) (540,000 )
Net cash from operating activities 1,366,419 572,364

Cash flows from investing activities
Purchase of tangible fixed assets (87,401 ) (54,538 )
Sale of tangible fixed assets 3,000 -
Interest received 9,314 7,048
Net cash from investing activities (75,087 ) (47,490 )

Cash flows from financing activities
Amount introduced by directors 1,200,000 500,000
Amount withdrawn by directors (7,801 ) (162,305 )
Equity dividends paid - (48,000 )
Cash contribution - (4,500,100 )
Net cash from financing activities 1,192,199 (4,210,405 )

Increase/(decrease) in cash and cash equivalents 2,483,531 (3,685,531 )
Cash and cash equivalents at beginning
of year

23

1,440,658

5,126,189

Cash and cash equivalents at end of year 23 3,924,189 1,440,658

KPH DE-CONSTRUCTION SERVICES LTD (REGISTERED NUMBER: 06202392)

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023


1. STATUTORY INFORMATION

KpH De-Construction Services Ltd is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

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


Monetary amounts in these Financial Statements are rounded to the nearest £1.

2. ACCOUNTING POLICIES

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

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

the requirement of paragraph 33.7.

Going concern
The director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements.

Turnover
Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company's activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts.

The company recognises turnover when:

- the amount of revenue can be reliably measured;
- it is probable that future economic benefits will flow to the entity; and
- specific criteria have been met for each of the company's activities.

Turnover from contracts for the provision of goods and services is recognised when the outcome of a contract can be measured reliably, the entity will recognise both the income and costs (excluding non-productive costs) by reference to the percentage of completion of the contract. Turnover is calculated as that proportion of the total contract value which costs to date bear to total costs for that contract. Full provision is made for any foreseeable losses.

Tangible fixed assets
Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life as follows:

Plant and machinery-20% on reducing balance
Fixtures and fittings-25% on reducing balance
Motor vehicles-25% on reducing balance

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.

KPH DE-CONSTRUCTION SERVICES LTD (REGISTERED NUMBER: 06202392)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JULY 2023


2. ACCOUNTING POLICIES - continued

Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Financial instruments
Financial instruments are classified by the director as basic or advanced following the conditions in FRS 102 Section 11. Basic financial instruments are recognised at amortised cost using the effective interest method, unless the effect of discounting would be immaterial, in which case they are stated at cost. The company’s only non-basic financial instrument relates to share-based payments. This accounting policy is described below.

Share-based payments
Certain employees of the company were awarded share options within a group share option scheme. Each tranche is an award and is considered a separate award with its own vesting period and grant date fair value. Fair value of each tranche is measured at the date of grant using the Black-Scholes option pricing model. Compensation expense is recognised over the tranche's vesting period based on the number of awards expected to vest. The number of awards expected to vest is reviewed over the vesting period, with any forfeitures recognised immediately.

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

Current or deferred taxation assets and liabilities are not discounted.

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

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

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

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

Research and development
Expenditure on research and development is written off in the year in which it is incurred.


Leasing commitments
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

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

KPH DE-CONSTRUCTION SERVICES LTD (REGISTERED NUMBER: 06202392)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JULY 2023


2. ACCOUNTING POLICIES - continued

Employment 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.

3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the company's accounting policies, the director is 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.

The critical judgements made by management that have a significant effect on the amounts recognised in the financial statements are described below.

Critical judgment and estimation uncertainty
In respect of construction contracts, management undertake regular progress reviews. Profits or losses are recognised within the income statement as part of a contract's revenue and cost where management consider that the outcome of a construction contract can be estimated reliably. Reliable estimates are determined with reference to each contract's stage of completion, future costs to complete and recoverability of amounts invoiced or applied for.

4. TURNOVER

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

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

2023 2022
£ £
Construction contracts - UK 25,217,614 16,082,588
25,217,614 16,082,588

5. EMPLOYEES AND DIRECTORS
2023 2022
£ £
Wages and salaries 1,925,921 1,459,941
Social security costs 204,988 146,122
Other pension costs 24,114 20,907
2,155,023 1,626,970

KPH DE-CONSTRUCTION SERVICES LTD (REGISTERED NUMBER: 06202392)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JULY 2023


5. EMPLOYEES AND DIRECTORS - continued

The average number of employees during the year was as follows:
2023 2022

Administration and support 8 7
Project delivery, support and admin 24 20
32 27

2023 2022
£ £
Director's remuneration 100,000 41,667

6. OPERATING PROFIT

The operating profit is stated after charging:

2023 2022
£ £
Other operating leases 66,426 57,520
Depreciation - owned assets 58,931 51,669
Loss on disposal of fixed assets 5,489 -

7. AUDITORS' REMUNERATION
2023 2022
£ £
Fees payable to the company's auditors for the audit of the company's
financial statements

13,000

11,000

The company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the group financial statements of the parent company.

8. INTEREST PAYABLE AND SIMILAR EXPENSES
2023 2022
£ £
Interest on overdue taxation 2,542 -

9. TAXATION

Analysis of the tax charge
The tax charge on the profit for the year was as follows:
2023 2022
£ £
Current tax:
UK corporation tax 613,971 309,286

Deferred tax 5,225 664
Tax on profit 619,196 309,950

KPH DE-CONSTRUCTION SERVICES LTD (REGISTERED NUMBER: 06202392)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JULY 2023


9. TAXATION - continued

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

2023 2022
£ £
Profit before tax 2,729,424 1,751,701
Profit multiplied by the standard rate of corporation tax in the UK of 19%
(2022 - 19%)

518,591

332,823

Effects of:
Expenses not deductible for tax purposes 51,038 63,617
Effect of enacted deferred tax rate 1,254 159
tax in prior periods
Effect of super deduction - (2,140 )
Research and development claims (10,305 ) (84,509 )
Profits chargeable at higher rate of tax post 31 March 23 58,618 -
Total tax charge 619,196 309,950

Factors that may affect the future tax charges
The Corporation Tax main rate for the years starting 1 April 2023 increased from 19% to 25%. In addition, a small profits rate of 19% for financial year April 2023 was brought in. The small profits rate will apply to profits of £50,000 or less. These changes were brought into effect during the year and will affect future tax charges.

10. DIVIDENDS
2023 2022
£ £
Ordinary shares of £1 each
Interim - 48,000

KPH DE-CONSTRUCTION SERVICES LTD (REGISTERED NUMBER: 06202392)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JULY 2023


11. TANGIBLE FIXED ASSETS
Fixtures
Plant and and Motor
machinery fittings vehicles Totals
£ £ £ £
COST
At 1 August 2022 64,343 100,101 246,298 410,742
Additions - - 87,401 87,401
Disposals - - (47,699 ) (47,699 )
At 31 July 2023 64,343 100,101 286,000 450,444
DEPRECIATION
At 1 August 2022 28,179 53,586 164,929 246,694
Charge for year 7,232 11,629 40,070 58,931
Eliminated on disposal - - (39,210 ) (39,210 )
At 31 July 2023 35,411 65,215 165,789 266,415
NET BOOK VALUE
At 31 July 2023 28,932 34,886 120,211 184,029
At 31 July 2022 36,164 46,515 81,369 164,048

12. STOCKS
2023 2022
£ £
Other inventories 488,662 305,870

13. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£ £
Trade debtors 3,258,607 3,040,819
Amounts recoverable on contract 3,815,705 600,390
Other debtors 144,470 144,969
Directors' current accounts - 71,736
VAT 304,339 -
Prepayments and accrued income 184,424 121,461
7,707,545 3,979,375

KPH DE-CONSTRUCTION SERVICES LTD (REGISTERED NUMBER: 06202392)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JULY 2023


14. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
£ £
Trade creditors 3,063,809 1,005,760
Amounts payable on contracts
and payments received on
account 629,515 36,973
Corporation Tax 458,611 202,098
Social security and other taxes 47,699 53,038
VAT - 92,507
Other creditors 133,887 94,679
Directors' current accounts 1,120,463 -
Accruals and deferred income 440,397 317,632
5,894,381 1,802,687

15. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
2023 2022
£ £
Share-based payments 276,437 69,109

The company has a share-option scheme which is open to all employees of the company at the discretion of the Board. Options are exercisable at a price equal to the market price of the company's shares on the date of the grant. In the Scheme the options vest over 3 years and are exercisable at the option holders discretion and should the options remain unexercised they lapse after 10 years from the date of the grant. The options also lapse following the employee leaving the company and various other conditions set out in the Scheme Rules.

Options were valued using the Black Scholes option pricing model. No performance conditions were included in the fair value calculations. The model inputs for the current period option grants were as follows:

2023
Exercise price£0.001
Share price at date of grant£352.40
Risk-free interest rate0.75%
Volatility22.70%
Dividend yield0.00%
Contractual life of option (years)10

The following table summarises the options outstanding at the end of the year and the movements during the year.

20232022
Outstanding at start of year1,765 -
Granted during the year- 1,765
Forfeited during the year- -
Exercised during the year- -
Outstanding at end of year1,7651,765

The total charge for the year relating to employee share-based payment plans was £207,328 (2022 - £69,109), all of which related to cash settled share-based payment transactions.

KPH DE-CONSTRUCTION SERVICES LTD (REGISTERED NUMBER: 06202392)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JULY 2023


16. LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:
2023 2022
£ £
Within one year 97,767 96,384
Between one and five years 286,407 274,081
In more than five years 230,000 290,000
614,174 660,465

17. PROVISIONS FOR LIABILITIES
2023 2022
£ £
Deferred tax 45,791 40,567

Deferred tax
£
Balance at 1 August 2022 40,567
Accelerated capital allowances 5,224
Balance at 31 July 2023 45,791

The deferred tax rate used is 25% as set out in the government's Budget (2022 - 25%).

18. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: £ £
10 Ordinary £1 10 10

19. PENSION COMMITMENTS

The company operates a defined contribution pension scheme. At the balance sheet date the company had an outstanding pension contributions liability of £4,942 (2022 - £4,157).

20. CAPITAL COMMITMENTS
2023 2022
£ £
Contracted but not provided for in the
financial statements 74,158 131,888

KPH DE-CONSTRUCTION SERVICES LTD (REGISTERED NUMBER: 06202392)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JULY 2023


21. RELATED PARTY DISCLOSURES

During the year a cash contribution of £NIL (2022 - £4,500,100) (as part consideration) was made to a Employee Ownership Trust, where KpH Group EOT Trustees Limited holds, as nominee only, 75% of the share capital of KpH Group Limited which was previously held by, or beneficially held by, the director. The remaining consideration of £12,500,000 will be funded by future cash contributions to be made from the company in accordance with the terms of the Trust Deed and related agreements and on the approval of the Trustees.

Summary of transactions with parent

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

Summary of transactions with other related parties

During the year, the company was recharged costs of £121,753 (2022 - £46,639) from a connected party. At the year end, the connected party was owed £152,753 (2022 - £87,954) from the company, included within creditors.

During the year, a connected party was recharged costs of £49,280 (2022 - £13,700) from the company. At the year end, the company was owed £36,186 (2022 - £52,108), included within debtors.

Included in administrative expenses, rent of £50,176 (2022 - £38,850) was charged by a connected party.

At the year end, the company was owed £136,837 (2022 - £136,837) from a connected party, included within other debtors.

Parent and ultimate parent undertaking

The immediate parent undertaking is KpH Group Limited, incorporated in England and Wales. KpH Group Limited prepares group financial statements of which copies can be requested at the registered office address of Unit 1 Paddock Barn Farm, Godstone Road, Caterham, England, CR3 6SF.

22. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS
2023 2022
£ £
Profit before taxation 2,729,424 1,751,701
Depreciation charges 58,932 51,669
Loss on disposal of fixed assets 5,489 -
Finance costs 2,542 -
Finance income (9,314 ) (7,048 )
2,787,073 1,796,322
Increase in stocks (182,792 ) (84,078 )
Increase in trade and other debtors (3,495,566 ) (778,425 )
Increase in trade and other creditors 2,617,704 178,545
Cash generated from operations 1,726,419 1,112,364

KPH DE-CONSTRUCTION SERVICES LTD (REGISTERED NUMBER: 06202392)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JULY 2023


23. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 July 2023
31/7/23 1/8/22
£ £
Cash and cash equivalents 3,924,189 1,440,658
Year ended 31 July 2022
31/7/22 1/8/21
£ £
Cash and cash equivalents 1,440,658 5,126,189


24. ANALYSIS OF CHANGES IN NET FUNDS

At 1/8/22 Cash flow At 31/7/23
£ £ £
Net cash
Cash at bank and in hand 1,440,658 2,483,531 3,924,189
1,440,658 2,483,531 3,924,189
Total 1,440,658 2,483,531 3,924,189