The directors present the strategic report for the year ended 31 December 2023.
The core activity of KWAY Holdings Limited is the holding of a portfolio of shareholdings in companies based within the UK.
The following KPls are used by the Board to assess the Company's progress against its objectives and to measure the performance and development of the Company.
Operating profit
Operating profit / (loss) 2023: (£73k) (2022: £7,930k)
This KPI shows shows the level of net income from its UK shareholdings after direct expenses. No dividend was received in 2023 compared to £8,000k in 2022.
Profit before taxation
Profit / (loss) before taxation 2023: (£2,751k) (2022: £5,709k)
The Profit / (loss) before taxation has been calculated as the difference between operating profit / (loss) and finance costs. This KPI is a main driver for the Company's overall profitability. The loss before tax was owing to no dividend being received in 2023 compared to £8,000k in 2022.
Equity shareholders' funds
Equity shareholders' funds 2023: (£2,637k) (2022: £144k)
The Equity shareholders' funds have been calculated as the sum of the called-up share capital and the cumulative profit and. loss account. The Equity shareholders' funds decreased to (£2,637k) due to no receipt of a dividend during 2023.
The financial statements have been prepared on the going concern basis, in accordance with Financial Reporting Standard 102 (FRS 102 issued by the Financial Reporting Council, which the directors believe to be appropriate for the reasons detailed below.
The directors have a reasonable expectation that the company and the Group have adequate resources to continue in operational existence for the 12 months from the date of these financial statements. The directors ask for assurances from its subsidiary (H+H UK Limited) and its parent company that adequate funding is in place to support the net asset position of the company. H+H International (the parent company) will make additional finance available to the company to meet the liabilities of the company as they fall due should they require it.
The company has letters of support from both its subsidiary and parent companies. The directors are therefore content that this will not cause a going concern issue.
The Board of Directors consider, both individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172(1)(a-f) of the Act) in the decisions taken during the year ended 31 December 2023. In particular, and by reference to our strategy, the Board decisions are made with reference to:
• Our strategy was designed to have a long-term beneficial impact on the company and to contribute to its success in delivering quality products and services to our customers. We will continue to operate our business within tight budgetary controls and in line with our regulatory targets.
• Our stakeholders are fundamental to the delivery of our strategy. Our relationship with our stakeholders is defined through our Trusted Partner ethos; do things to ensure both parties have equal leverage in the relationship.
• We strive to ensure that no harm comes to our Stakeholders.
• Our strategy considered the impact of the company's operations on the community and environment and our wider societal responsibilities. To this end we only innovate and invest to support long term sustainable business.
• Our intention, as the Board of Directors, is to behave responsibly towards our shareholders so that they too may benefit from the successful delivery of our plan and ensure that management operate the business in a responsible manner. We operate within the high standards of business conduct and good governance expected for a business such as ours. By following these actions we will contribute to the delivery of our strategy.
The directors also demonstrate regards to all stakeholders and matters set out in s172(1) of the Companies Act 2006, including:
(a) the likely consequences of any decision in the long term;
(b) the interests of the company's employees;
(c) the need to foster the company's business relationships with suppliers, customers and others;
(d) the impact of the company's operations on the community and the environment;
(e) the desirability of the company maintaining a reputation for high standards of business conduct; and
(f) the need to act fairly as between members of the company.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2023.
The results for the year are set out on page 9.
No dividend was proposed and paid in 2023 (2022: 5,693k).
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The company's main risk is that is is dependant on the decisions made by the parent company. These risks are managed by the procedures set out in the paragraph regarding the going concern basis.
Whilst there are many uncertainties facing both the global and UK economies, the outlook for the investments in the UK remains positive in the medium term.
Lopian Gross Barnett & Co were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
The company has made qualifying third-party indemnity provisions for the benefit of its directors which were made during the year and remain in force at the date of this report.
Basis for 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
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
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.
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.
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.
We obtained an understanding of laws and regulations that affect the entity, focusing on those that had a direct effect on the financial statements or that had a fundamental effect on its operations.
Where considered necessary we enquired of those charged with governance, reviewed correspondence and reviewed meeting minutes for evidence of non-compliance with relevant laws and regulations.
We gained an understanding of the controls environment which includes the controls in place to prevent and detect fraud. We enquired of those charged with governance about any incidences of fraud that had taken place during the accounting period.
We reviewed financial statements disclosures to assess compliance with relevant laws and regulations.
We enquired of those charged with governance about actual and potential litigation and claims.
We performed analytical procedures to identify any unusual or unexpected relationships that might indicate risks of material misstatement due to fraud.
In addressing the risk of fraud due to management override of internal controls we tested the appropriateness of journal entries and assessed whether the judgements made in making accounting estimates were indicative of a potential bias.
Due to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal controls. We are not responsible for preventing fraud or non-compliance with laws and regulations and cannot be expected to detect all fraud and non-compliance with laws and regulations.
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.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
KWAY Holdings Limited is a private company limited by shares incorporated in England and Wales. The registered office is Celcon House, Ightham, Sevenoaks, Kent, TN15 9HZ.
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 £.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
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.
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.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
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.
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.
The auditor's remuneration for Kway Holdings Limited is £1,000 (2022: £1,000). This is paid by another group undertaking; H+H UK Limited.
The average monthly number of persons (including directors) employed by the company during the year was:
No remuneration was paid to the directors.
The actual charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
The company's subsidiaries, which are all incorporated in England and Wales, are listed below. KWAY Holdings Limited owns the quantity of shares as noted below. H+H International A/S owns the remainder. The registered office of the below subsidiaries is the same as on page 11.
H+H UK Holdings Limited is a wholly owned subsidiary of KWAY Holdings Limited (100% of 80,000,001 ordinary shares). H+H UK Holdings Limited is a holding company that carries on investment business.
H+H UK Limited is a subsidiary of H+H UK Holdings Limited and as such is an indirect holding of KWAY Holdings Limited.
Details of the company's subsidiaries at 31 December 2023 are as follows:
Group loans are due for repayment within 5 days of any repayment request issued by the company, however, we do not anticipate needing to recall any funds in the next 12 months due to the company's profitable operations.
The largest and smallest group in which the results of the company are consolidated is that headed by H+H International A/S, incorporated in Denmark, who is the ultimate controlling company.
The consolidated accounts of this company are available to the public and may be obtained from the Head Office at Lautrupsgade 7, 5th Floor, 2100 Copenhagen 0, Denmark.
The Group banking agreement with Nordea Denmark (a branch of Nordea Abp, Finland) was renewed in March 2023 for a term of 3 years. As part of that renewal Kway Holdings Ltd are no longer required to provide a cross company guarantee.
There are no post balance sheet events.
There were no post related party transactions in the period.