Company registration number 00965953 (England and Wales)
JKH DRAINAGE UNITS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
JKH DRAINAGE UNITS LIMITED
COMPANY INFORMATION
Directors
Mrs E M Hoare
Mr B Prince
Mr D Prince
Mr J Prince
Secretary
Mrs E M Hoare
Company number
00965953
Registered office
Chiswick Avenue
Mildenhall
IP28 7AY
Auditor
Ensors Accountants LLP
Saxon House
Moseley's Farm Business Centre
Fornham All Saints
Bury St Edmunds
IP28 6JY
JKH DRAINAGE UNITS LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 31
JKH DRAINAGE UNITS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Review of the business

JKH is a family business founded in 1969 which is engaged in the design and manufacture of pre-cast concrete and fabricated metal products. JKH also owns and operates a fleet of lorries to distribute the products it manufactures across England, Wales and Scotland.

 

Business model

JKH specialises in the design and manufacture of water control products, in particular pre-cast concrete headwalls. JKH’s headwalls are typically installed by groundworkers and civil engineering contractors for use on housing, commercial and infrastructure schemes.

By leveraging its expertise in the water management sector, JKH is able to work with customers to design engineered solutions which meet our customer specific requirements which has seen it extend its product range over the last 18 months.

 

Strategic Objectives

Since relocating to a larger production facility in June 2021 JKH has prioritised investment in employee training and development, upgrades to business systems and production process improvements. This continued investment will enable JKH to diversify and scale it’s business sustainably.

 

Strategic Initiatives

During 2023 JKH focused on restructuring and growing it's finance, operations and quality departments in order to improve business efficiency and customer experience. JKH also appointed a business development manager to focus on building relationships with potential new customers and work more closely with existing customers to better understand and meet their needs.

 

Principal risks and uncertainties

JKH generates monthly management reports and completes variance analysis to track business performance against budgets and KPI’s enabling the company to react quickly and adapt as necessary to deviations.

 

Accredited bodies undertake annual audits of JKH’s business systems to ensure compliance with the following standards: ISO 9001, ISO 14001, FORS Silver, BS EN 1090, BS EN 15258.

 

The purchase and development of JKH’s new production facility required additional borrowing. The majority of this borrowing was set up on long term fixed rates. This strategy is proving beneficial during the current period of high interest rates.

 

The Directors closely monitor inflation and price rises in the marketplace and how this affects the business margins, taking corrective action where necessary in order to maintain performance.

 

JKH DRAINAGE UNITS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Development and performance

Sustainability and corporate responsibility

 

The directors of JKH Drainage Units Limited are committed to promoting the success of the company for the benefit of its shareholders while also considering the interests of its employees, customers, suppliers, the environment, and the community in which it operates. In making decisions that affect the company's long-term success, the directors have taken into account the following factors as required by Section 172 of the Companies Act 2006:

 

Shareholders: We have acted in a manner that promotes the long-term success of the business, maximising shareholder value while also considering the impact of our decisions on other stakeholders.

 

Employees: We recognise the importance of our employees and are committed to providing a safe and supportive work environment. This includes investing in training and development opportunities and promoting diversity and inclusion within the workforce.

 

Customers: We are dedicated to delivering high-quality products and services that meet the needs and expectations of our customers. We strive to maintain strong relationships with our customers and address any concerns or feedback promptly.

 

Suppliers: We work closely with our suppliers to ensure fair and ethical business practices throughout our supply chain. This includes promoting sustainability and responsible sourcing of materials. JKH has a policy of adhering to supplier payment terms in order to build good relationships.

 

Environment: We are committed to minimising our environmental impact by implementing sustainable practices across our operations and developing more environmentally friendly products. This includes reducing waste, conserving energy, and exploring alternative renewable energy sources.

 

Community: We actively engage with the communities in which we operate, supporting local initiatives and charities where possible. We aim to be a responsible business which contributes positively to society.

 

Outlook and future prospects

JKH continues to priorities the development of engineered solutions in partnership with key customers in order to differentiate us from competition.

 

Key performance indicators

The companies key financial and other performance indicators during the year were:

 

Turnover £M

Gross Profit %

Net Assets £M

Average number of employees

2019

6

55

3.5

46

2020

6.1

61

5

45

2021

8.4

52

7

62

2022

11

54

10.2

62

2023

9.3

52

11.3

61

 

The market sector in which the company operates has been impacted during 2023 by economic pressures, the war in Ukraine, bank rate increases, inflation and other factors. This has created a level of uncertainty and customers have reduced and slowed down investment in the projects we are involved in. This has resulted in a drop in income compared to 2022, however margin has been maintained during this period and income levels have remained above 2021 levels. The net assets of the company during this time have continued to grow, this has mainly been achieved through growth in our cash reserves.

 

The start to 2024 has seen some of these factors continue to impact demand, however confidence is building and going into Q2 of 2024 sales activity has started to return and the strategic initiatives of the company have created new longer term opportunities for the Company.

 

JKH DRAINAGE UNITS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

On behalf of the board

Mr B Prince
Director
6 August 2024
JKH DRAINAGE UNITS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company continued to be that of the manufacture of pre-cast concrete units.

Results and dividends

The results for the year are set out on page 9.

Ordinary dividends were paid amounting to £200,000. The directors do not recommend payment of a further dividend.

Directors

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

Mrs E M Hoare
Mr B Prince
Mr D Prince
Mr J Prince
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.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Mr B Prince
Director
6 August 2024
JKH DRAINAGE UNITS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -

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.

JKH DRAINAGE UNITS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF JKH DRAINAGE UNITS LIMITED
- 6 -
Opinion

We have audited the financial statements of JKH Drainage Units Limited (the 'company') for the year ended 31 December 2023 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:

JKH DRAINAGE UNITS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF JKH DRAINAGE UNITS LIMITED (CONTINUED)
- 7 -
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.

 

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:

 

 

However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.

Extent to which the audit was considered capable of detecting irregularities, including fraud

Our audit was designed to include tests of detail together with an assessment of the control environment to enable us to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement due to fraud. This included work on areas where we consider there is a higher risk of fraud including revenue recognition, management override of systems and control, transactions with related parties, commitments and contingencies and accounting estimates.

 

We also obtained an understanding of the legal and regulatory framework that the company operates in, through discussions with the directors and other management, and from our own knowledge and experience of the sector.

JKH DRAINAGE UNITS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF JKH DRAINAGE UNITS LIMITED (CONTINUED)
- 8 -
Audit response to risks identified

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:

 

However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

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

Barry Gostling
Senior Statutory Auditor
For and on behalf of Ensors Accountants LLP
6 August 2024
Chartered Accountants
Statutory Auditor
Saxon House
Moseley's Farm Business Centre
Fornham All Saints
Bury St Edmunds
IP28 6JY
JKH DRAINAGE UNITS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
9,279,554
10,943,045
Cost of sales
(4,487,465)
(5,003,196)
Gross profit
4,792,089
5,939,849
Distribution costs
(1,021,239)
(1,042,735)
Administrative expenses
(2,248,061)
(1,996,291)
Other operating income
125,418
-
0
Operating profit
4
1,648,207
2,900,823
Interest receivable and similar income
7
13,788
388
Interest payable and similar expenses
8
(181,776)
(191,574)
Amounts written off investments
9
-
969,805
Profit before taxation
1,480,219
3,679,442
Tax on profit
10
(186,887)
(335,249)
Profit for the financial year
1,293,332
3,344,193

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

JKH DRAINAGE UNITS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
£
£
Profit for the year
1,293,332
3,344,193
Other comprehensive income
-
-
Total comprehensive income for the year
1,293,332
3,344,193
JKH DRAINAGE UNITS LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
11,043,001
11,459,027
Investment property
13
1,400,000
1,400,000
12,443,001
12,859,027
Current assets
Stocks
14
813,054
664,725
Debtors
15
1,483,977
1,727,192
Cash at bank and in hand
2,642,892
1,533,177
4,939,923
3,925,094
Creditors: amounts falling due within one year
16
(2,980,703)
(1,929,075)
Net current assets
1,959,220
1,996,019
Total assets less current liabilities
14,402,221
14,855,046
Creditors: amounts falling due after more than one year
17
(3,023,716)
(4,394,620)
Provisions for liabilities
Deferred tax liability
20
81,090
256,343
(81,090)
(256,343)
Net assets
11,297,415
10,204,083
Capital and reserves
Called up share capital
23
100
100
Revaluation reserve
-
0
46,779
Profit and loss reserves
24
11,297,315
10,157,204
Total equity
11,297,415
10,204,083

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 6 August 2024 and are signed on its behalf by:
Mr B Prince
Director
Company registration number 00965953 (England and Wales)
JKH DRAINAGE UNITS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
100
48,556
6,811,233
6,859,889
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
3,344,194
3,344,194
Transfers
-
-
0
1,777
1,777
Other movements
-
(1,777)
-
(1,777)
Balance at 31 December 2022
100
46,779
10,157,204
10,204,083
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
1,293,332
1,293,332
Dividends
11
-
-
(200,000)
(200,000)
Transfers
-
-
0
46,779
46,779
Other movements
-
(46,779)
-
(46,779)
Balance at 31 December 2023
100
-
0
11,297,315
11,297,415
JKH DRAINAGE UNITS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
28
2,958,327
3,231,825
Interest paid
(181,776)
(191,574)
Income taxes paid
(510,706)
(250,235)
Net cash inflow from operating activities
2,265,845
2,790,016
Investing activities
Purchase of tangible fixed assets
(587,030)
(2,774,669)
Proceeds from disposal of tangible fixed assets
317,019
-
0
Interest received
13,788
388
Net cash used in investing activities
(256,223)
(2,774,281)
Financing activities
Repayment of bank loans
(310,565)
77,766
Payment of finance leases obligations
(389,342)
369,087
Dividends paid
(200,000)
-
0
Net cash (used in)/generated from financing activities
(899,907)
446,853
Net increase in cash and cash equivalents
1,109,715
462,588
Cash and cash equivalents at beginning of year
1,533,177
1,070,589
Cash and cash equivalents at end of year
2,642,892
1,533,177
JKH DRAINAGE UNITS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
1
Accounting policies
Company information

JKH Drainage Units Limited is a private company limited by shares incorporated in England and Wales. The registered office is Chiswick Avenue, Mildenhall, IP28 7AY.

1.1
Accounting convention

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

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

The financial statements have been prepared under the historical cost convention, modified to include investment properties at fair value. The principal accounting policies 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 is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of goods is recognised when all the following conditions are satisfied:

 

Specifically, revenue from the sale of goods is recognised when goods are delivered and legal title is passed.

1.4
Tangible fixed assets

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

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

Freehold land and buildings
4% straight line
Plant and equipment
20% to 33% straight line
Fixtures and fittings
15% reducing balance
Motor vehicles
25% 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.

JKH DRAINAGE UNITS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.5
Investment property

Investment property, which is property held to earn rentals, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible 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.

1.7
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Costs, which comprise direct production costs, are based on the method most appropriate to the type of inventory class, but usually on a first-in-first-out basis. Overheads are charged to profit or loss as incurred. Net realisable value is based on the estimated selling price less any estimated completion or selling costs.

 

When stocks are sold, the carrying amount of those stocks is recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of stocks to net realisable value and all losses of stocks are recognised as an expense in the period in which the write-down or loss occurs. The amount of any reversal of any write-down of stocks is recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs.

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

1.8
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.

JKH DRAINAGE UNITS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
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.

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.

JKH DRAINAGE UNITS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
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.

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.

JKH DRAINAGE UNITS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
Deferred tax

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

 

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

1.12
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

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payments obligations. The contributions are recognised as expenses when they fall due. Amounts not paid are shown in accruals in the balance sheet. The assets of the plan are held separately from the company in independently administered funds.

1.14
Leases

Where the company enters into a lease which entails taking substantially all the risks and rewards of ownership of an asset, the lease is treated as a finance lease.

 

Leases which do not transfer substantially all the risks and rewards of ownership to the Company are classified as operating leases.

 

Assets held under finance leases are initially recognised as assets of the Company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet date as a finance lease obligation. Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Company's policy on borrowing costs (see the accounting policy above).

 

Assets held under finance leases are depreciated in the same way as owned assets.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term.

 

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis.

JKH DRAINAGE UNITS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

A sale and leaseback transaction involves the sale of an asset and the leasing back of the same asset. The lease payment and the sale price are usually interdependent because they are negotiated as a package. The accounting treatment of a sale and leaseback transaction depends on the type of lease:

 

Sale and leaseback transaction results in a finance lease

 

If a sale and leaseback transaction results in a finance lease, the seller-lessee shall not recognise immediately, as income, any excess of sales proceeds over the carrying amount. Instead, the seller-lessee shall defer such excess and amortise it over the lease term.

 

Sale and leaseback transaction results in an operating lease

 

If a sale and leaseback transaction results in an operating lease, and it is clear that the transaction is established at fair value, the seller-lessee shall recognise any profit or loss immediately. If the sale price is below fair value, the seller-lessee shall recognise any profit or loss immediately unless the loss is compensated for by future lease payments at below market price. In that case the seller-lessee shall defer and amortise such loss in proportion to the lease payments over the period for which the asset is expected to be used. If the sale price is above fair value, the seller-lessee shall defer the excess over fair value and amortise it over the period for which the

asset is expected to be used.

1.15
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

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.

JKH DRAINAGE UNITS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 20 -
Key sources of estimation uncertainty

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

Valuation of stocks of finished goods

The company values stocks of finished goods based on the selling price of the finished goods, less the gross profit margin, plus attributable overheads. The assessment of attributable overheads is made by management and is based on employee activity in relation to production, floor area of factory use for production and other relevant factors. Attributable overheads are calculated on a percentage basis, and then allocated to finished goods items appropriately.

Valuation of investment properties

The company makes an estimate for the market value of the investment property which has been included in the financial statements at the year-end. The assessment is made by management and is based on the rental value of the property, property value in the area and contributing market factors.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Manufacture of pre-cast concrete products
9,279,554
10,943,045
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
9,279,554
10,943,045
2023
2022
£
£
Other revenue
Interest income
13,788
388
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
9,580
-
0
Fees payable to the company's auditor for the audit of the company's financial statements
12,375
9,850
Depreciation of owned tangible fixed assets
985,542
834,451
Profit on disposal of tangible fixed assets
(29,471)
-
Impairment of stocks recognised or reversed
176
-
0
Operating lease charges
(329)
11,122
JKH DRAINAGE UNITS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
5
Employees

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

2023
2022
Number
Number
Production staff
37
40
Distribution staff
10
9
Administrative staff
10
8
Management staff
4
5
Total
61
62

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
2,648,169
2,407,338
Social security costs
300,503
246,970
Pension costs
55,793
63,330
3,004,465
2,717,638
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
291,014
327,400
Company pension contributions to defined contribution schemes
7,552
-
298,566
327,400

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
105,690
142,802
Company pension contributions to defined contribution schemes
4,910
4,800
JKH DRAINAGE UNITS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
13,788
388
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
13,788
388
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
121,192
167,094
Other finance costs:
Interest on finance leases and hire purchase contracts
60,584
24,480
181,776
191,574
9
Amounts written off investments
2023
2022
£
£
Changes in the fair value of investment properties
-
969,805
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
465,297
511,038
Adjustments in respect of prior periods
(103,157)
(97,188)
Total current tax
362,140
413,850
Deferred tax
Origination and reversal of timing differences
(175,253)
(78,601)
Total tax charge
186,887
335,249
JKH DRAINAGE UNITS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Taxation
(Continued)
- 23 -

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:

2023
2022
£
£
Profit before taxation
1,480,219
3,679,442
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
348,162
699,094
Tax effect of expenses that are not deductible in determining taxable profit
25,949
418
Tax effect of income not taxable in determining taxable profit
-
0
(184,263)
Adjustments in respect of prior years
(103,157)
-
0
Other permanent differences
-
0
27
Deferred tax adjustments in respect of prior years
(128,269)
(160,346)
Fixed asset timing differences
46,982
(54,481)
Remeasurement of deferred tax for changes in tax rates
(2,780)
34,800
Taxation charge for the year
186,887
335,249
11
Dividends
2023
2022
£
£
Final paid
200,000
-
0
JKH DRAINAGE UNITS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
12
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2023
10,375,668
3,191,309
153,565
1,110,436
14,830,978
Additions
194,867
586,660
42,403
33,134
857,064
Disposals
(118,309)
(373,875)
-
0
(143,150)
(635,334)
At 31 December 2023
10,452,226
3,404,094
195,968
1,000,420
15,052,708
Depreciation and impairment
At 1 January 2023
947,416
1,936,822
80,962
406,751
3,371,951
Depreciation charged in the year
355,946
443,058
13,629
172,909
985,542
Eliminated in respect of disposals
(118,309)
(124,153)
-
0
(105,324)
(347,786)
At 31 December 2023
1,185,053
2,255,727
94,591
474,336
4,009,707
Carrying amount
At 31 December 2023
9,267,173
1,148,367
101,377
526,084
11,043,001
At 31 December 2022
9,428,252
1,254,487
72,603
703,685
11,459,027
13
Investment property
2023
£
Fair value
At 1 January 2023 and 31 December 2023
1,400,000

Investment property comprises commercial land and property which is held for letting by the Company. The fair value of the investment property has been arrived at on the basis of comparable market data.

14
Stocks
2023
2022
£
£
Raw materials and consumables
304,482
311,380
Finished goods and goods for resale
508,572
353,345
813,054
664,725
JKH DRAINAGE UNITS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,311,256
1,588,646
Other debtors
-
0
99,947
Prepayments and accrued income
172,721
38,599
1,483,977
1,727,192
16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
18
1,182,655
291,694
Obligations under finance leases
19
382,104
321,032
Trade creditors
329,373
315,972
Corporation tax
265,284
413,850
Other taxation and social security
376,888
224,649
Deferred income
21
5,078
-
0
Other creditors
126,218
97,034
Accruals and deferred income
313,103
264,844
2,980,703
1,929,075

The balance payable in relation to obligations under finance leases is secured against the assets which the agreements relate (plant and machinery & motor vehicles).

 

Within the obligations under finance leases balance is an amount of £46,690 (2022:£42,617). The UK government guarantees the finance to the lender in respect of this amount, and agreed to pay interest for the first 12 months, as well as the hire purchase completion fee. Some of these assets were removed as security in the period, which has triggered a settlement repayment. An additional payment of £nil (2022: £122,308) was therefore made as an early repayment compared to the original agreement on this hire purchase balance this year.

 

Included within bank loans are amounts payable of £1,022,262 (2022: £128,741) which are secured by way of fixed and floating charges over the property and land held within the company.

 

Included within bank loans are amounts payable of £135,394 (2022: £123,091 ) which are guaranteed by the UK government as part of the Business Interruption Loan Scheme and Recovery Loan Scheme. Within this balance, £18,807 (2022: £18,808 ) is also secured over various plant and machinery within the company.

17
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
18
2,235,769
3,437,295
Obligations under finance leases
19
776,945
957,325
Deferred income
21
11,002
-
0
3,023,716
4,394,620
JKH DRAINAGE UNITS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
17
Creditors: amounts falling due after more than one year
(Continued)
- 26 -

The balance payable in relation to obligations under finance leases is secured against the assets which the agreements relate (plant and machinery & motor vehicles).

 

Within the obligations under finance leases balance is an amount of £46,710 (2022:£93,400). The UK government guarantees the finance to the lender in respect of this amount, and agreed to pay interest for the first 12 months, as well as the hire purchase completion fee.

 

Included within bank loans are amounts payable of £1,939,875 (2022: £2,745,860 ) which are secured by way of fixed and floating charges over the property and land held within the company.

 

Included within bank loans are amounts payable of £158,615 (2022: £257,618 ) which are secured by the UK government as part of the Business Interruption Loan Scheme and Recovery Loan Scheme. Within this balance, £16,190 (2022: £39,586) is also secured over various plant and machinery within the company.

Amounts included above which fall due after five years are as follows:
Payable by instalments
426,856
535,381
Payable other than by instalments
1,199,424
1,199,424
1,626,280
1,734,805
18
Loans and overdrafts
2023
2022
£
£
Bank loans
3,418,424
3,728,989
Payable within one year
1,182,655
291,694
Payable after one year
2,235,769
3,437,295

The long term borrowings in the form of bank loans as per above includes both fixed and floating charges over the entity's land and property, as well as some items of plant and machinery. Within the above, there are also balances which are guaranteed by the UK government as part of the CBIL scheme.

JKH DRAINAGE UNITS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
18
Loans and overdrafts
(Continued)
- 27 -

Within the bank loans and overdrafts balance is an amount of £34,997 (2022: £58,394 ). There is a set interest charge payable on this loan of £76,885, £30,775 of which has been covered by the Business Interruption Scheme from the UK government in accounting periods prior to the current. The UK government guarantees the finance to the lender, and has agreed to pay interest for the first 12 months, as well as the loan completion fee. The loan is also linked to a further hire purchase agreement where plant and machinery assets have been used as security. Some of these assets were removed as security in the prior period, which triggered a settlement repayment. An additional payment of £nil (2022: £122,177) was therefore made as an early repayment compared to the original loan agreement on this loan balance this year.

 

Within the bank loans and overdrafts balance is an amount of £134,977 (2022: £199,764 ). Interest is payable on this loan at a rate of 8.9%. The UK government guarantees the finance to the lender, and has agreed to pay interest in the first 12 months, as well as the loan completion fee.

 

Also included within the bank loans and overdrafts balance is an amount of £206,250 (2022: £237,095). Interest charged on this loan is variable, at the rate of 2.97% above base rate. The loan is repayable over a period of 120 months.

 

There is then a further loan within the bank loans and overdrafts balance which was taken out in conjunction with the above loan, outstanding at an amount of £216,277 (2022: £236,584). Interest charged on this loan is fixed at a rate of 5.45%, there is a break fee of 4% for the first 60 months of the loan period, reducing to a fixed rate of 2% for the remaining duration of the loan period. This loan is repayable over a total period of 120 months.

 

Within the bank loans and overdrafts balance is an amount of £83,054 (2022: £122,551 ). Interest is payable on this loan at a rate of 10.86%. The UK government guarantees the finance to the lender, and has agreed to pay interest in the first 12 months, as well as the loan completion fee.

 

Finally, the bank loans and overdrafts figure also includes fixed rate mortgages totalling £2,745,861 (2022: £2,874,601). The terms of these mortgage agreements range from 5 year repayment terms, to 10 years. The rates of interest on these mortgages range from 2.92% - 4.025%. These mortgages are fixed term only, and do not cover by instalments the total repayable balances as mentioned above.

19
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
382,104
321,032
In two to five years
776,945
957,325
1,159,049
1,278,357

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 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. During the year (2022: n/a) , the company was party to a sale and finance leaseback transaction in respect of plant and machinery, the agreement did not include any unusual conditions.

JKH DRAINAGE UNITS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
20
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
81,090
256,343
2023
Movements in the year:
£
Liability at 1 January 2023
256,343
Credit to profit or loss
(175,253)
Liability at 31 December 2023
81,090

The deferred tax liability set out above is expected to reverse within 5 years and relates to accelerated capital allowances that are expected to mature within the same period.

21
Deferred income
2023
2022
£
£
Other deferred income
16,080
-
Included in the financial statements as follows:
Current liabilities
5,078
-
0
Non-current liabilities
11,002
-
0
16,080
-
0
22
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
55,793
63,330

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.

23
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
JKH DRAINAGE UNITS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
23
Share capital
(Continued)
- 29 -
24
Profit and loss reserves

The profit and loss account includes all current and prior period retained profits and losses.

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:

2023
2022
£
£
Within one year
57,413
72,413
Between two and five years
75,342
136,505
132,755
208,918
Lessor

The operating leases represent leases to third parties. The leases are negotiated over terms of 10 years and rentals are fixed for 5 years. All leases include a provision for yearly upward rent reviews according to prevailing market conditions. There are no options in place for either party to extend the lease terms.

At the reporting end date the company had contracted with tenants for the following minimum lease payments:

2023
2022
£
£
Within one year
120,000
110,000
Between two and five years
310,000
430,000
430,000
540,000
26
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Sales
Sales
2023
2022
£
£
Other related parties
3,092
3,346
JKH DRAINAGE UNITS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
26
Related party transactions
(Continued)
- 30 -
Amounts payable under operating lease contracts
Salaries, social security and pension costs
2023
2022
2023
2022
£
£
£
£
Other related parties
-
15,000
173,014
64,468

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due from related parties
£
£
Other related parties
-
99,947

The following amounts were recognised as an expense in the period in respect of bad and doubtful debts due from related parties:

2023
2022
£
£
Other related parties
91,347
-
27
Directors' transactions

Dividends totalling £200,000 (2022 - £0) were paid in the year in respect of shares held by the company's directors.

Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Shareholder & Director
-
(17,737)
47,529
(91,242)
(61,450)
Shareholder & Director
-
(38,556)
71,652
(86,505)
(53,409)
Director
-
-
-
403
403
(56,293)
119,181
(177,344)
(114,456)
JKH DRAINAGE UNITS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
28
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
1,293,332
3,344,193
Adjustments for:
Taxation charged
186,887
335,249
Finance costs
181,776
191,574
Investment income
(13,788)
(388)
Gain on disposal of tangible fixed assets
(29,471)
-
Fair value gain on investment properties
-
0
(969,805)
Depreciation and impairment of tangible fixed assets
985,542
834,451
Movements in working capital:
(Increase)/decrease in stocks
(148,329)
20,163
Decrease in debtors
243,215
60,296
Increase/(decrease) in creditors
243,083
(583,908)
Increase in deferred income
16,080
-
Cash generated from operations
2,958,327
3,231,825
29
Analysis of changes in net debt
1 January 2023
Cash flows
New finance leases
31 December 2023
£
£
£
£
Cash at bank and in hand
1,533,177
1,109,715
-
2,642,892
Borrowings excluding overdrafts
(3,728,989)
310,565
-
(3,418,424)
Obligations under finance leases
(1,278,357)
389,342
(270,034)
(1,159,049)
(3,474,169)
1,809,622
(270,034)
(1,934,581)
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