Nippon Kaiji Kyokai (UK) Limited
Annual Report and Financial Statements
For the year ended 31 December 2023
Company Registration No. 08998564 (England and Wales)
Nippon Kaiji Kyokai (UK) Limited
Company Information
Directors
Tatsuya Hayashi
Yosuke Sato
Kazuto Yoshinaga
Secretary
Yosuke Sato
Company number
08998564
Registered office
12th Floor, Tower 42
25 Old Broad Street
London
EC2N 1HQ
Auditor
Moore Kingston Smith LLP
6th Floor
9 Appold Street
London
EC2A 2AP
Nippon Kaiji Kyokai (UK) Limited
Contents
Page
Directors' report
1
Directors' responsibilities statement
2
Independent auditor's report
3 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 21
Nippon Kaiji Kyokai (UK) Limited
Directors' Report
For the year ended 31 December 2023
Page 1
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 ship classification, survey, audit & inspection services.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Moideen Kunju Abdul Rahim
(Resigned 31 March 2024)
Tatsuya Hayashi
Kentaro Miura
(Resigned 31 March 2024)
Yosuke Sato
(Appointed 1 April 2024)
Kazuto Yoshinaga
(Appointed 1 April 2024)
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
On behalf of the board
..............................
Kazuto Yoshinaga
Director
.........................
Nippon Kaiji Kyokai (UK) Limited
Directors' Responsibilities Statement
For the year ended 31 December 2023
Page 2
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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
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.
Nippon Kaiji Kyokai (UK) Limited
Independent Auditor's Report
To the Member of Nippon Kaiji Kyokai (UK) Limited
Page 3
Opinion
We have audited the financial statements of Nippon Kaiji Kyokai (UK) Limited (the 'company') for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity 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 FRS 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 December 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.
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.
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.
Nippon Kaiji Kyokai (UK) Limited
Independent Auditor's Report (Continued)
To the Member of Nippon Kaiji Kyokai (UK) Limited
Page 4
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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Directors' Report has been prepared in accordance with applicable legal requirements.
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 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:
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 remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
the directors were not entitled to take advantage of the small companies exemption from the requirement to prepare a strategic report.
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.
Nippon Kaiji Kyokai (UK) Limited
Independent Auditor's Report (Continued)
To the Member of Nippon Kaiji Kyokai (UK) Limited
Page 5
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.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Nippon Kaiji Kyokai (UK) Limited
Independent Auditor's Report (Continued)
To the Member of Nippon Kaiji Kyokai (UK) Limited
Page 6
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
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.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Jonathan Sutcliffe
Senior Statutory Auditor
for and on behalf of Moore Kingston Smith LLP
13 September 2024
Chartered Accountants
Statutory Auditor
6th Floor
9 Appold Street
London
EC2A 2AP
Nippon Kaiji Kyokai (UK) Limited
Statement of Comprehensive Income
For the year ended 31 December 2023
Page 7
2023
2022
Notes
£
£
Turnover
3
2,135,555
2,425,990
Administrative expenses
(2,021,547)
(2,396,037)
Other operating income
3
7,265
Operating profit
4
114,011
37,218
Interest payable and similar expenses
7
(13,570)
(19,849)
Profit before taxation
100,441
17,369
Tax on profit
8
(59,659)
(37,982)
Profit/(loss) for the financial year
40,782
(20,613)
The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.
Nippon Kaiji Kyokai (UK) Limited
Balance Sheet
As at 31 December 2023
Page 8
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
3,561,444
3,622,471
Current assets
Debtors
11
486,992
734,291
Cash at bank and in hand
303,602
176,809
790,594
911,100
Creditors: amounts falling due within one year
12
(442,012)
(625,170)
Net current assets
348,582
285,930
Total assets less current liabilities
3,910,026
3,908,401
Creditors: amounts falling due after more than one year
13
(253,149)
(292,306)
Net assets
3,656,877
3,616,095
Capital and reserves
Called up share capital
16
500,000
500,000
Other reserves
28,005
35,848
Profit and loss reserves
3,128,872
3,080,247
Total equity
3,656,877
3,616,095
The financial statements were approved by the board of directors and authorised for issue on 9 September 2024 and are signed on its behalf by:
Kazuto Yoshinaga
Director
Company Registration No. 08998564
Nippon Kaiji Kyokai (UK) Limited
Statement of Changes in Equity
For the year ended 31 December 2023
Page 9
Share capital
Other reserves
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2022
500,000
44,586
3,092,122
3,636,708
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
(20,613)
(20,613)
Other movements
-
(8,738)
8,738
-
Balance at 31 December 2022
500,000
35,848
3,080,247
3,616,095
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
40,782
40,782
Other movements
-
(7,843)
7,843
-
Balance at 31 December 2023
500,000
28,005
3,128,872
3,656,877
Nippon Kaiji Kyokai (UK) Limited
Notes to the Financial Statements
For the year ended 31 December 2023
Page 10
1
Accounting policies
Company information
Nippon Kaiji Kyokai (UK) Limited is a private company limited by shares incorporated in England and Wales. The registered office is 12 Floor, Tower 42, 25 Old Broad Street, London, EC2N 1HQ.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The individual accounts of Nippon Kaiji Kyokai (UK) Limited have adopted the following disclosure exemptions:
a) The requirements of section 4 Statement of Financial Position paragraph 4.12(a)(iv).
b) The requirements of section 7 Cash Flows and section 3 Financial Statement presentation
paragraph 3.17(d).
c) The requirements of section 11 paragraphs 11.39 to 11.48A and section 12 paragraphs 12.26
to 12.29A providing the equivalent disclosures required by this FRS are included in the
consolidated financial statements of the group in which the entity is consolidated.
d) The requirement of section 33 Related Party Disclosures paragraph 33.7
1.2
Going concern
Ttruehe income comes from the parent company who, as part of the wider group, make strong profits and have confirmed that they will continue to support the UK company for a period of at least one year from the date of signature of the audit report of these financial statements. Given this, the directors believe the company is in a good position to continue operating owing to the healthy balance sheet it holds, the strong position it occupies within the market, and the support received from its parent company.
It is on this basis that the directors consider it reasonable to prepare the accounts on a going concern basis.
1.3
Turnover
The turnover shown in the profit and loss account represents revenue derived from services supplied to customers during the year, net of value added tax. Revenue is recognised through the provision of a service agreement contract with the customer and is calculated upon costs of services which fall within the company's ordinary activities performed to date.
Software
20% straight line
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.
Nippon Kaiji Kyokai (UK) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 11
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
Nil depreciation charged
Buildings
10% straight line
Fixtures and fittings
25% straight line
Motor vehicles
33% 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.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Cash at bank and in hand
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.
Nippon Kaiji Kyokai (UK) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 12
1.7
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.
Nippon Kaiji Kyokai (UK) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 13
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
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 though 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.
1.8
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.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.9
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.
Nippon Kaiji Kyokai (UK) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 14
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.
1.10
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.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
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.
2
Judgements and key sources of estimation uncertainty
Estimates and judgments are continually evaluated and are based on historical experience and
other factors, including the expectations of future events that are believed to be reasonable under the circumstances.
The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.
Nippon Kaiji Kyokai (UK) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
Page 15
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.
Discount factor applied to long term financing
The effective interest rate charge is subject to the change in external costs of financing. The
effective interest rate is assessed annually and amended where necessary.
Useful economic lives of tangible assets
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation, and physical condition of the assets.
Useful economic lives of intangible assets
The annual amortisation charge for intangible assets is sensitive to changes in the estimated lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. Goodwill impairment reviews are also performed annually. These reviews require an estimation of the value in use of the cash generating units to which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise for the cash generating unit and a suitable discount rate to calculate present value.
Revenue
Revenue is recognised through the provision of a service agreement calculated upon cost of services.
3
Turnover
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Surveying Services
2,135,555
2,425,990
2023
2022
£
£
Turnover analysed by geographical market
Turnover attributable to geographical markets outside the UK
2,135,555
2,425,990
Nippon Kaiji Kyokai (UK) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 16
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
23,550
20,916
Depreciation of owned tangible fixed assets
97,851
104,239
Operating lease charges
424,993
382,156
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Average number of persons employed by the company
9
9
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
995,088
1,499,967
Social security costs
60,360
25,380
Pension costs
27,351
12,683
1,082,799
1,538,030
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
551,606
467,645
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
206,510
183,527
Nippon Kaiji Kyokai (UK) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 17
7
Interest payable and similar expenses
2023
2022
£
£
Interest payable to group undertakings
13,570
19,849
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
71,641
37,982
Deferred tax
Origination and reversal of timing differences
(11,982)
Total tax charge
59,659
37,982
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
100,441
17,369
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
23,624
3,300
Tax effect of expenses that are not deductible in determining taxable profit
3,523
106
Permanent capital allowances in excess of depreciation
20,259
11,932
Other permanent differences
12,253
22,644
Taxation charge for the year
59,659
37,982
Nippon Kaiji Kyokai (UK) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 18
9
Intangible fixed assets
Software
£
Cost
At 1 January 2023
3,282
Disposals
(3,282)
At 31 December 2023
Amortisation and impairment
At 1 January 2023
3,282
Disposals
(3,282)
At 31 December 2023
Carrying amount
At 31 December 2023
At 31 December 2022
10
Tangible fixed assets
Freehold Land and buildings
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
4,622,263
28,525
183,073
4,833,861
Additions
36,824
36,824
Disposals
(13,275)
(13,275)
At 31 December 2023
4,622,263
15,250
219,897
4,857,410
Depreciation and impairment
At 1 January 2023
1,071,196
11,392
128,802
1,211,390
Depreciation charged in the year
69,482
3,306
25,063
97,851
Eliminated in respect of disposals
(13,275)
(13,275)
At 31 December 2023
1,140,678
1,423
153,865
1,295,966
Carrying amount
At 31 December 2023
3,481,585
13,827
66,032
3,561,444
At 31 December 2022
3,551,067
17,133
54,271
3,622,471
Nippon Kaiji Kyokai (UK) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 19
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
448,403
Other debtors
250,857
150,466
Prepayments and accrued income
210,217
121,486
461,074
720,355
Deferred tax asset (note 14)
25,918
13,936
486,992
734,291
12
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
112,823
89,907
Amounts owed to group undertakings
180,538
47,000
Corporation tax
53,491
29,957
Other creditors
7,442
9,638
Accruals and deferred income
87,718
448,668
442,012
625,170
13
Creditors: amounts falling due after more than one year
2023
2022
£
£
Amounts owed to group undertakings
253,149
292,306
14
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Assets
Assets
2023
2022
Balances:
£
£
Accelerated capital allowances
25,918
13,936
Nippon Kaiji Kyokai (UK) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
14
Deferred taxation
(Continued)
Page 20
2023
Movements in the year:
£
Asset at 1 January 2023
(13,936)
Credit to profit or loss
(11,982)
Asset at 31 December 2023
(25,918)
The deferred tax asset set out above is expected to reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period.
15
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
27,351
12,683
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.
16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
500,000
500,000
500,000
500,000
17
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
238,596
222,901
Between two and five years
89,000
267,000
327,596
489,901
Nippon Kaiji Kyokai (UK) Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 21
18
Related party transactions
The company has taken advantage of the exemption available in accordance with FRS 102 Section 33.1A Related Party Disclosures not to disclose transactions entered into between two or more members of a group, as the company is a wholly owned subsidiary undertaking of the group to which it is party to the transactions.
19
Ultimate controlling party
The immediate and ultimate parent undertaking is Nippon Kaiji Kyokai, a foundation registered in Japan.
Copies of Nippon Kaiji Kyokai's consolidated financial statements can be obtained from the
Company Secretary at 4-7, Kioi-cho, Chiyoda-ku, Tokyo, 102-8567, Japan.
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