Company registration number 07149852 (England and Wales)
KILHAN CONSTRUCTION LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2024
KILHAN CONSTRUCTION LTD
COMPANY INFORMATION
Director
Mr M Kilcoyne
Company number
07149852
Registered office
Unit 3 Technology Park
Colindeep Lane
London
United Kingdom
NW9 6BX
Auditor
Lawrence Grant LLP
2nd Floor
Hygeia House
66 College Road
Harrow
Middlesex
United Kingdom
HA1 1BE
Bankers
National Westminster Bank Plc
Audits Team
Bolton Corporate & Commercial Service Centre
Parklands, De Havilland Way
Horwich
Bolton
England
BL6 4YU
KILHAN CONSTRUCTION LTD
CONTENTS
Page
Strategic report
1 - 3
Director's report
4 - 5
Independent auditor's report
6 - 9
Profit and loss account
10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Statement of cash flows
14
Notes to the financial statements
15 - 25
KILHAN CONSTRUCTION LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 1 -
The director presents the strategic report for the year ended 28 February 2024.
Review of the business
The results for the year under review and the financial position at the year-end were considered to be excellent by the director. The company's objective is to generate consistent and sustainable profits to ensure the financial health and growth of the company. Company intends to continue achieving the timely and successful completion of construction projects within budget and in accordance with quality standards to create a successful and sustainable operation.
As shown in the company's profit and loss account set out on page 10, the company made a profit after tax of £2,317,981 (2023: £1,218,473).
The company's balance sheet on page 12 shows that it has net assets of £7,023,932 (2023: £4,901,891).
Key performance indicators
The director monitors progress on the overall company strategy and the individual strategic elements by reference to a number of key performance indicators. The key financial performance indicators of the company are gross profit margins and turnover.
The gross profit of the company for the period under review was £4,447,564 (2023: £2,892,335), producing a satisfactory gross margin of 12% (2023: 10%) on a turnover of £35,824,208 (2023: £28,094,600).
The key non-financial performance indicators are adherence to a high quality of operational standards set by the management in compliance with the ISO 45001-Health and Safety Management, ISO9001-Quality Management and ISO14001-Environmental Management.
KILHAN CONSTRUCTION LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 2 -
Principal risks and uncertainties
The management of the business and the execution of the company's strategy are subject to a number of risks.
Risks are reviewed by the director and appropriate processes put in place to monitor and mitigate them. The key business risks affecting the company are set out below:-
Accidents and injuries on construction sites can lead to legal liabilities, medical expenses, and project delays.
Non-compliance with safety regulations may result in fines and penalties.
Cost overruns and budget overages can occur due to unforeseen circumstances such as material price increases, labour shortages, or design changes.
Fluctuations in interest rates can affect borrowing costs.
Payment delays or defaults from clients or subcontractors can impact cash flow.
Unforeseen site conditions, delays or environmental issues, can disrupt construction plans and can prolong project timelines.
Design changes or errors can lead to additional costs and delays.
Compliance with quality standards and environmental laws is critical.
Failure to comply can result in legal actions, fines, or project stoppages.
Contractual disputes and litigation can arise from disagreements between parties involved in the project.
Dependency on specific suppliers for materials can lead to delays if there are disruptions in the supply chain.
Fluctuations in material prices can impact project costs.
Economic downturns can lead to a decrease in construction demand.
Changes in real estate markets or shifts in government policies can impact the viability of projects.
Construction activities can have environmental impacts, and failure to address them can result in fines and damage to the company's reputation.
Climate-related risks, such as extreme weather events, can affect construction schedules and costs.
Development and performance
The directors aim to continue with the management policies which has resulted in the company's steady growth in the recent years.
The outlook for 2025 is reasonably encouraging with the director being optimistic with the turnover expected to be near the current levels and ensuring a similar level of performance can be maintained.
KILHAN CONSTRUCTION LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 3 -
Mr M Kilcoyne
Director
8 January 2025
KILHAN CONSTRUCTION LTD
DIRECTOR'S REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 4 -
The director presents his annual report and financial statements for the year ended 28 February 2024.
Principal activities
The principal activity of the company continued to be that of construction services.
Results and dividends
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £195,940. The director does not recommend payment of a further dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr M Kilcoyne
Auditor
Lawrence Grant LLP 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.
Statement of director's responsibilities
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement 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.
KILHAN CONSTRUCTION LTD
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 5 -
On behalf of the board
Mr M Kilcoyne
Director
8 January 2025
KILHAN CONSTRUCTION LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF KILHAN CONSTRUCTION LTD
- 6 -
Opinion
We have audited the financial statements of Kilhan Construction Ltd (the 'company') for the year ended 28 February 2024 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:
give a true and fair view of the state of the company's affairs as at 28 February 2024 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 director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the company’s ability to continue as going concern.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
KILHAN CONSTRUCTION LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF KILHAN CONSTRUCTION LTD (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 director's 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.
Responsibilities of director
As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines 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 director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
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.
KILHAN CONSTRUCTION LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF KILHAN CONSTRUCTION LTD (CONTINUED)
- 8 -
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with law and regulations, was as follows:
The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognize non-compliance with applicable laws and regulations;
We identified the laws and regulations applicable to the company through discussion with directors and other management, and from our commercial knowledge and experience of the relevant sector;
The specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, are as follows;
- Companies Act 2006
- FRS102
- Tax legislation
- Employment Legislation
- Health and Safety at Work
We assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and reviewing board minutes;
Laws and regulations were communicated within the audit team at the planning meeting, and during the audit as any further laws and regulation were identified. The audit team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur by:
Making enquires of management as to where they consider there was susceptibility to fraud and their knowledge of actual suspected and alleged fraud;
Considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations;
Reviewing the financial statements and testing the disclosures against supporting documentation;
Performing analytical procedures to identify any unusual or unexpected trends or anomalies;
Inspecting and testing journal entries to identify unusual or unexpected transactions;
Assessing whether judgement and assumptions made in determining significant accounting estimates were indicative of management bias; and
Investigating the rationale behind significant transactions, or transactions that are unusual or outside the company’s usual course of business.
The areas that we identified as being susceptible to misstatement through fraud were:
Management bias in the estimates and judgements made;
Management override of controls; and
Posting of unusual journals or transactions.
We did not identify any matters relating to non-compliance with laws and regulation or relating to fraud.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional
concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities 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.
KILHAN CONSTRUCTION LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF KILHAN CONSTRUCTION LTD (CONTINUED)
- 9 -
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.
P G Levy
Senior Statutory Auditor
For and on behalf of Lawrence Grant LLP
9 January 2025
Chartered Accountants
Statutory Auditor
2nd Floor
Hygeia House
66 College Road
Harrow
Middlesex
United Kingdom
HA1 1BE
KILHAN CONSTRUCTION LTD
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 10 -
2024
2023
Notes
£
£
Turnover
3
35,824,208
28,094,600
Cost of sales
(31,376,644)
(25,202,265)
Gross profit
4,447,564
2,892,335
Administrative expenses
(1,388,456)
(1,325,338)
Other operating income
41,483
65,201
Operating profit
4
3,100,591
1,632,198
Interest receivable and similar income
7
3,407
738
Interest payable and similar expenses
8
(20,690)
(10,876)
Profit before taxation
3,083,308
1,622,060
Tax on profit
9
(765,327)
(403,587)
Profit for the financial year
2,317,981
1,218,473
The profit and loss account has been prepared on the basis that all operations are continuing operations.
KILHAN CONSTRUCTION LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 11 -
2024
2023
£
£
Profit for the year
2,317,981
1,218,473
Other comprehensive income
-
-
Total comprehensive income for the year
2,317,981
1,218,473
KILHAN CONSTRUCTION LTD
BALANCE SHEET
AS AT
28 FEBRUARY 2024
28 February 2024
- 12 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
512,537
600,468
Current assets
Debtors
12
7,185,597
5,000,174
Cash at bank and in hand
4,965,239
3,024,971
12,150,836
8,025,145
Creditors: amounts falling due within one year
13
(5,501,716)
(3,447,021)
Net current assets
6,649,120
4,578,124
Total assets less current liabilities
7,161,657
5,178,592
Creditors: amounts falling due after more than one year
14
(22,691)
(127,606)
Provisions for liabilities
Deferred tax liability
16
115,034
149,095
(115,034)
(149,095)
Net assets
7,023,932
4,901,891
Capital and reserves
Called up share capital
18
4
4
Profit and loss reserves
7,023,928
4,901,887
Total equity
7,023,932
4,901,891
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved and signed by the director and authorised for issue on 8 January 2025
Mr M Kilcoyne
Director
Company registration number 07149852 (England and Wales)
KILHAN CONSTRUCTION LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 13 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 March 2022
4
3,810,789
3,810,793
Year ended 28 February 2023:
Profit and total comprehensive income
-
1,218,473
1,218,473
Dividends
10
-
(127,375)
(127,375)
Balance at 28 February 2023
4
4,901,887
4,901,891
Year ended 28 February 2024:
Profit and total comprehensive income
-
2,317,981
2,317,981
Dividends
10
-
(195,940)
(195,940)
Balance at 28 February 2024
4
7,023,928
7,023,932
KILHAN CONSTRUCTION LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 14 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
22
2,620,212
2,913,504
Interest paid
(20,690)
(10,876)
Income taxes paid
(220,851)
(160,483)
Net cash inflow from operating activities
2,378,671
2,742,145
Investing activities
Purchase of tangible fixed assets
(88,311)
(438,332)
Proceeds from disposal of tangible fixed assets
5,670
Interest received
3,407
738
Net cash used in investing activities
(79,234)
(437,594)
Financing activities
Payment of finance leases obligations
(163,229)
138,033
Dividends paid
(195,940)
(127,375)
Net cash (used in)/generated from financing activities
(359,169)
10,658
Net increase in cash and cash equivalents
1,940,268
2,315,209
Cash and cash equivalents at beginning of year
3,024,971
709,762
Cash and cash equivalents at end of year
4,965,239
3,024,971
KILHAN CONSTRUCTION LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 15 -
1
Accounting policies
Company information
Kilhan Construction Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Unit 3 Technology Park, Colindeep Lane, London, United Kingdom, NW9 6BX.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover comprises the invoiced value of goods and services supplied by the Company, net of Value Added Tax and trade discounts.
The Company recognises revenue when:
a contract with the customer is identified of which containing performance obligations;
the transaction price is determined and assigned to the performance obligations;
the performance obligations have been met by the Company;
economic benefits arising from the performance obligations are being achieved; and
it is probable that the amount recognised will be recovered.
Performance obligations agreed to the construction contracts use the percentage-of-completion method.
This method measures the percentage of total costs incurred to date to estimated total costs for each contract. Contract costs include all direct material and labour costs. Under this method, revenue is recognised proportionately as work progresses, reflecting the completion percentage of the contract. The completion of performance obligations is determined by third-party valuers.
If the value of construction services provided by the Company exceed amounts invoiced to the customer a contract asset is recognised. If amounts invoiced to the customer exceed the value of services rendered, a contract liability is recognised.
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:
Plant and equipment
25% reducing balance
Fixtures and fittings
20% reducing balance
Motor vehicles
25% reducing balance
KILHAN CONSTRUCTION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
1
Accounting policies
(Continued)
- 16 -
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 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 and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
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.
KILHAN CONSTRUCTION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
1
Accounting policies
(Continued)
- 17 -
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
KILHAN CONSTRUCTION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
1
Accounting policies
(Continued)
- 18 -
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.
1.8
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.
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.
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.
KILHAN CONSTRUCTION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
1
Accounting policies
(Continued)
- 19 -
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
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Construction business
35,824,208
28,094,600
2024
2023
£
£
Other revenue
Interest income
3,407
738
KILHAN CONSTRUCTION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 20 -
4
Operating profit
2024
2023
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
22,025
22,000
Depreciation of owned tangible fixed assets
170,572
199,815
Operating lease charges
152,500
131,577
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
14
13
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
490,683
501,370
Social security costs
48,105
48,360
Pension costs
16,648
14,247
555,436
563,977
6
Director's remuneration
2024
2023
£
£
Remuneration for qualifying services
12,660
11,243
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
2,383
738
Other interest income
1,024
Total income
3,407
738
KILHAN CONSTRUCTION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
7
Interest receivable and similar income
(Continued)
- 21 -
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
2,383
738
8
Interest payable and similar expenses
2024
2023
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
20,690
10,876
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
799,388
254,492
Deferred tax
Origination and reversal of timing differences
(34,061)
149,095
Total tax charge
765,327
403,587
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:
2024
2023
£
£
Profit before taxation
3,083,308
1,622,060
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
770,827
308,191
Tax effect of expenses that are not deductible in determining taxable profit
53,776
54,739
Deferred tax adjustments in respect of prior years
(34,061)
149,095
Tax at marginal rate
(16,633)
Capital allowances
(8,582)
(108,438)
Taxation charge for the year
765,327
403,587
KILHAN CONSTRUCTION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 22 -
10
Dividends
2024
2023
£
£
Final paid
195,940
127,375
11
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 March 2023
1,175,135
13,205
312,667
1,501,007
Additions
32,560
55,751
88,311
Disposals
(5,670)
(5,670)
At 28 February 2024
1,202,025
13,205
368,418
1,583,648
Depreciation and impairment
At 1 March 2023
686,023
9,113
205,403
900,539
Depreciation charged in the year
129,000
818
40,754
170,572
At 28 February 2024
815,023
9,931
246,157
1,071,111
Carrying amount
At 28 February 2024
387,002
3,274
122,261
512,537
At 28 February 2023
489,112
4,092
107,264
600,468
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
4,635,538
3,063,999
Other debtors
2,502,226
1,936,175
Prepayments and accrued income
47,833
7,185,597
5,000,174
KILHAN CONSTRUCTION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 23 -
13
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
15
128,959
187,273
Trade creditors
3,746,844
2,439,408
Corporation tax
833,029
254,492
Other taxation and social security
35,284
84,462
Other creditors
623,338
219,435
Accruals and deferred income
134,262
261,951
5,501,716
3,447,021
14
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under finance leases
15
22,691
127,606
15
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
128,959
187,273
In two to five years
22,691
127,606
151,650
314,879
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
115,034
149,095
KILHAN CONSTRUCTION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
16
Deferred taxation
(Continued)
- 24 -
2024
Movements in the year:
£
Liability at 1 March 2023
149,095
Credit to profit or loss
(34,061)
Liability at 28 February 2024
115,034
17
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
16,648
14,247
18
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
of £1 each
4
4
4
4
19
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:
2024
2023
£
£
Within one year
133,688
133,688
Between two and five years
294,752
294,752
In over five years
239,637
313,325
668,077
741,765
20
Related party transactions
Company owed £610,756 (2023: £206,950 ) to KS Framework Limited, which is an associated company.
Company was owed by another associated company, Malro Plant Services Limited, a balance of £30,065 (2023: £17,596 - the company owed).
21
Director's transactions
Dividends totalling £146,955 (2023 - £95,531) were paid in the year in respect of shares held by the company's director.
KILHAN CONSTRUCTION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2024
- 25 -
22
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
2,317,981
1,218,473
Adjustments for:
Taxation charged
765,327
403,587
Finance costs
20,690
10,876
Investment income
(3,407)
(738)
Depreciation and impairment of tangible fixed assets
170,572
199,815
Movements in working capital:
Decrease in stocks
493,352
Increase in debtors
(2,185,423)
(114,875)
Increase in creditors
1,534,472
703,014
Cash generated from operations
2,620,212
2,913,504
23
Analysis of changes in net funds
1 March 2023
Cash flows
28 February 2024
£
£
£
Cash at bank and in hand
3,024,971
1,940,268
4,965,239
Obligations under finance leases
(314,879)
163,229
(151,650)
2,710,092
2,103,497
4,813,589
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