Company registration number 08016159 (England and Wales)
KHAN INVESTMENTS HOLDINGS LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 MAY 2024
KHAN INVESTMENTS HOLDINGS LTD
COMPANY INFORMATION
Directors
Ms S Hemmatian
Mr A Khan
Mr A Khan
Company number
08016159
Registered office
Floor 2
9 Portland Street
Manchester
M1 3BE
Auditor
AMS Accountants Corporate Ltd
Floor 2
9 Portland Street
Manchester
M1 3BE
Business address
Portland House
Portland Street
Hanley
Stoke On Trent
Staffordshire
ST1 5NG
KHAN INVESTMENTS HOLDINGS LTD
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 8
Independent auditor's report
9 - 11
Group statement of comprehensive income
12
Group balance sheet
13
Company balance sheet
14
Group statement of changes in equity
15
Company statement of changes in equity
16
Group statement of cash flows
17
Notes to the financial statements
18 - 38
KHAN INVESTMENTS HOLDINGS LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 30 MAY 2024
- 1 -

The directors present the strategic report for the year ended 30th May 2024.

 

The group consists of four companies, Khan Investment Holdings Ltd ("Parent"), Khan Estates Limited, PFG Group Limited and The Pentagon Food Group Ltd ("subsidiaries").

 

The below strategic report has a focus on The Pentagon Food Group Ltd (PFG), as the majority of the trade within the Group is in relation to this subsidiary.

Fair review of the business

For the fiscal year ending 2024, The Pentagon Food Group (PFG) continued to build on its strong foundation, focusing on strategic growth, operational efficiency, and customer satisfaction. Here is a detailed review of the year:

Strategic Growth and Expansion: PFG remained committed to driving revenue growth through key strategic acquisitions and organic growth. The Freshways Click and Collect Branches were a significant focus, as they are integral to the business. The company also explored vertical and horizontal acquisition opportunities to expand its market presence. In March 2024, PFG launched its Direct-to-consumer home delivery business from its flagship site in Stoke on Trent, further diversifying its service offerings.

Operational Efficiency and Cost Management: Throughout the year, PFG maintained a strong focus on cost management and operational efficiency. The company continued to drive efficiencies and productivity to combat inflation and minimize the burden on customers. All cost sectors were under constant review, and operational effectiveness was a key area of focus for the management team. PFG also re-assessed its credit policy, ensuring strict adherence to credit terms and implementing new internal controls to mitigate credit risk and exposure.

Supply Chain and Inventory Management: PFG's proactive approach to supply chain management was evident as the company carried buffer stock to mitigate sales loss and ensure product availability for customers. The company maintained clear communication with customers regarding price increases driven by rising fuel, energy, and operating costs. PFG’s new 1400 Pallet state-of-the-art cold store completed post-year-end 2023, provided increased storage capacity and optimized operations.

Customer engagement and service: PFG's three click and collect centres continued to demonstrate strong growth, with customers favouring this convenient option over traditional delivery. This shift helped alleviate the burden on distribution amid driver and staff shortages and allowed PFG to re-optimize operations to control operational expenses and budgets. The company remained focused on delivering a consistent supply of food service products, maintaining clear communication with customers, and ensuring customer satisfaction.

Financial Health and IT Investment: PFG maintained a low level of debt and a considerable cash reserve, ensuring financial stability. The company had a strong working relationship with its bankers, who supported PFG's growth and ambitious plans. PFG remained active in IT developments and investments, aligning with its digital strategy. The introduction of a Corporate Performance Management (CPM) solution and a balanced scorecard across business functions ensured complete organizational alignment. The use of data and business intelligence tools enabled real-time reporting and analysis, allowing PFG to proactively address potential threats and control key budget drivers.

Commitment to Vision and Mission: PFG's commitment to its vision and mission was unwavering. The company focused on delivering its promise to the food service sector and customers by planning, coordinating, and forecasting demand while dealing with challenging supply chain conditions. PFG's efforts in managing working capital, optimizing inventory, and ensuring operational effectiveness were key contributors to maintaining margins and achieving business goals.

The new cold storage facility had a significant positive impact on PFG's operations. The added storage capacity allowed PFG to buy in bulk, which supported the gross profit margin by taking advantage of bulk purchasing discounts.

KHAN INVESTMENTS HOLDINGS LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
- 2 -

This strategic move not only helped in managing costs but also ensured that PFG could maintain a consistent supply of products, even during periods of high demand or supply chain disruptions.

Additionally, the increased storage capacity enabled PFG to explore new frozen product lines, thereby enhancing the range and offering available to customers. This expansion into new product lines allowed PFG to cater to a broader customer base and Segments and meet diverse customer needs, further strengthening its market position.

Overall, the new cold storage facility played a crucial role in optimizing operations, supporting financial performance, and expanding PFG's product offerings.

As PFG moves forward, the company remains dedicated to driving growth, optimizing operations, and enhancing customer satisfaction. The strategic initiatives and investments made in FY24 position PFG for accelerated growth in the coming years.

Principal risks and uncertainties

The process of risk acceptance and risk management is addressed through a framework of policies, procedures and internal controls. All policies are subject to Board approval and ongoing review by management. Compliance with regulations, legal and ethical standards is a high priority for the Group and the finance department take on an important oversight role in this regard, to ensure that a proper internal control framework exists to manage financial risk and that controls operate effectively.

 

The key risks facing the group continues to be maintaining gross margins to generate cash flow and the impact of exchange rate fluctuations on goods bought overseas, as well as the risks associated with Brexit. The group has lending facilities with Lloyds plc. The company continues to make loan repayments within the terms of the agreement whilst maintaining positive cash flows.

Developments and Performance

The Pentagon Food Group (PFG) has seen significant developments throughout the financial year 2024. The company has continued to expand its market presence and enhance its product offerings. Notable developments include:

  1. New Product Launches: PFG introduced several new products and brands to its portfolio, which have been well-received by existing and new customers.

  2. Improved Operational Efficiency: We have adopted a new WMS (Warehouse Management System), allowing our pickers to pick at a 100% accuracy, minimising Shortage claims and credit notes, this has resulted in a huge increase in CSAT levels.

  3. Organizational Changes: The organizational chart was updated to align the structure and roles within the company to its growth strategy.

  4. Cold Storage Investment: PFG invested in cold storage and commissioned a new Cold Store in August 2023, providing an additional capacity of 700 pallets. This investment has enhanced PFG's range capability and storage.

  5. Stock Management System: We have developed a new stock replenishment and management system to reduce our Working Capital tied into Inventory and replenish stock inline with demand, overall reducing inventory levels and Increasing Order Fill rate.

KHAN INVESTMENTS HOLDINGS LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
- 3 -
Key Strategic Objectives

 

PFG's strategic objectives for the financial year 2025 are centred around growth, sustainability, and excellence. The key objectives include:

  1. Expansion through Acquisitions: PFG aims to grow through a buy-and-build strategy, targeting acquisitions that will add significant value to the group. The focus is on businesses that can be integrated seamlessly and contribute to the overall revenue and EBITDA growth.

  2. Enhancing Market Position: PFG is committed to strengthening its market position by leveraging its financial strength, industry knowledge, and support functions. The company plans to expand into new geographic markets and increase its product base.

  3. Sustainability and Responsibility: PFG continues to prioritize sustainability and responsibility in its operations. The company is dedicated to providing long-term value and building lasting relationships with all stakeholders.

  4. Customer Base and Volume Growth: PFG's objective for 2025 is to grow its customer base and volume. With inflation easing and the prices of some goods falling, PFG maintained growth in its volume output throughout 2024 and the number of new customers it is now serving.

Plans for the Future

Looking ahead, PFG has outlined several plans to ensure continued growth and success:

  1. International Expansion: PFG plans to establish international sales offices in major cities across Asia and the MENA region. This expansion will help the company tap into new markets and increase its global footprint.

  2. Resource Investment: PFG will invest in resources, including hiring new talent and enhancing departmental structures, to support its growth plans. The company aims to achieve a target of £100 million in revenue with an 8% EBITDA Margin by 2028.

  3. Sales Force Development: PFG is investing heavily in its Sales Force strategy, including BDM’s, Outbound Calling and Inbound Lead Management, the Sale Force is designed to support the rapid Sales growth ambitions and targets we have as a business and is aligned with our overall strategic objectives and strategy.

  4. Innovation and Product Development: PFG will continue to innovate and develop new products to meet the evolving needs of its customers. The company is committed to maintaining its reputation for delivering quality and service.

  5. New Branches: PFG has identified regions to roll out its Freshways Branches, this will start from Q3 & 4 of our Financial Yr 2025, and then throughout 2026-2028.

Key performance indicators

The director’s business KPI’s for the financial period are as follows:

 

Turnover     £54.4m        (2023: £54.0m)

Gross profit    14.4%        (2023: 14.0%)

EBITDA        £1.8m        (2023: 1.8m)

Liquidity        1.81 : 1        (2023: 1.67: 1)

 

Other performance indicators

The Directors do not consider there to be any other key performance indicators it uses to manage the business other than those noted above.

KHAN INVESTMENTS HOLDINGS LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
- 4 -
Directors's statement of compliance with duty to promote the success of the company

This statement by the Board of Directors describes how they approached their responsibilities under s172(1)(a) to (f) of the Companies Act 2006 in the financial year ended 30 May 2024.

 

The stakeholders of the company include employees, clients and suppliers of the company.

The directors consider they have acted in good faith to promote the success of the company on behalf of its stakeholders, in relation to the matters set out in s172 of the Act.

 

The directors monitor and review strategic objectives against long term plans. Regular reviews are held across key business areas, including financial performance, risks and opportunities, health & safety, human resources and operations. The company's performance and progress are reviewed regularly at department, senior leadership and Board meetings.

 

The fundamental principle in the governance of the company is that of ensuring transparent conduct which reflects fairness in all dealings with employees, clients and suppliers.

The company has a policy of equal opportunities in all aspects of employment. The company's employees are vital to the success of the company. The directors understand that it is critical to engage with and understanding their views and to ensure that all employees' interests are considered. Throughout the company there is consultation at all levels of staff on matters of concern. The consultations evolve to meet the changing needs of the company and are considered valuable by everyone. The policy of the company is to consult and discuss matters with employees and to resolve any problems in accordance with relevant procedures and legislation.

 

The company's customers and suppliers are fundamental to the success of the company and the company strives to continually improve and strengthen its solution delivery and customer offering for the mutual benefit of all stakeholders.

 

The company has adopted a policy of only dealing with creditworthy clients. The directors understand the needs for debtor management and so liaises with its clients to minimise any risk of non-payment of debts.

 

The directors' intentions are to behave responsibly toward all stakeholders and to treat them fairly and equally to ensure everyone benefits from the long-term success of the company.

Environmental matters are taken into consideration by the directors as part of their decision-making process, in order to minimise the company's impact on the environment wherever possible.

 

The directors have overall responsibility for determining the company's purpose, values and strategy and for ensuring high standards of governance. The primary aim of the directors is to promote a sustainable success for the long-term of the company, generating value for all stakeholders. Throughout the next financial year the directors will continue to review and challenge how the company can improve its engagement with all stakeholders.

On behalf of the board

Mr A Khan
Director
20 February 2025
KHAN INVESTMENTS HOLDINGS LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 MAY 2024
- 5 -

The directors present their annual report and financial statements for the year ended 30 May 2024.

Principal activities

The principal activity of the company and group continued to be that of a cash and carry wholesaler and property investment.

Results and dividends

The results for the year are set out on page 12.

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

Directors

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

 

Ms Shaqayeq Hemmatian

Mr Adnan Sajid         (resigned 31st May 2023)

Mr Arfat Khan

Mr Ashfaq Khan

Financial instruments
Liquidity risk

The group manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the group has sufficient liquid resources to meet the operating needs of the business.

Interest rate risk

The group is exposed to fair value interest rate risk on its fixed rate borrowings and cash flow interest rate risk on floating rate deposits, bank overdrafts and loans. The group uses interest rate derivatives to manage the mix of fixed and variable rate debt so as to reduce its exposure to changes in interest rates.

Foreign currency risk

The group’s principal foreign currency exposures arise from trading with overseas companies. Group policy permits but does not demand that these exposures may be hedged in order to fix the cost in sterling. This hedging activity involves the use of foreign exchange forward contracts.

Credit risk

Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board.

 

All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.

Auditor

In accordance with the company's articles, a resolution proposing that AMS Accountants Corporate Ltd be reappointed as auditor of the group will be put at a General Meeting.

Energy and carbon report

As the company has consumed more than 40,000 kWh of energy in this reporting period, it is required to report on its emissions, energy consumption and energy efficiency activities.

 

KHAN INVESTMENTS HOLDINGS LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
- 6 -
2024
2023
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
- Gas combustion
47,309
26,765
- Electricity purchased
1,567,150
1,046,220
- Fuel consumed for transport
3,370,401
3,211,786
4,984,860
4,284,771
2024
2023
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
- Gas combustion
8.64
4.89
- Fuel consumed for owned transport
724.43
690.36
733.07
695.25
Scope 2 - indirect emissions
- Electricity purchased
303.06
202.32
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the group
-
-
Total gross emissions
1,036.13
897.57
Intensity ratio
Tonnes CO2e per full-time employee
11.91
10.20
Quantification and reporting methodology

The group has followed the 2019 HM Government Environmental Reporting Guidelines. The group has also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government’s Conversion Factors for Company Reporting

Intensity measurement

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per full-time employee, the recommended ratio for the sector.

KHAN INVESTMENTS HOLDINGS LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
- 7 -
Measures taken to improve energy efficiency

Throughout the fiscal year, PFG has remained steadfast in its commitment to fostering energy efficiency and sustainability within its operations. We have actively pursued various initiatives aimed at reducing our carbon footprint and optimizing energy usage across our facilities.

 

1. Facility Upgrades: Upgrading lighting systems to energy-efficient LED fixtures, employing smart sensors for automated lighting controls, and optimizing HVAC systems for improved energy performance.

 

2. Technology Integration: Incorporating advanced technologies and automation to streamline processes, reduce energy waste, and enhance overall operational efficiency.

 

3. Employee Engagement: Conducting comprehensive training programs and awareness campaigns to empower our workforce with energy-saving practices, encouraging a culture of conscious energy consumption throughout the organization.

 

4. Renewable Energy Adoption: Exploring and investing in renewable energy sources such as solar or wind power to diversify our energy portfolio and reduce reliance on non-renewable resources.

 

These initiatives have yielded notable outcomes, including reduced energy consumption and cost savings.

 

As we move into the next fiscal year, PGH remains committed to raising the bar for energy efficiency. Planned initiatives on our roadmap include:

 

1. Further Infrastructure Enhancements: Continuing facility upgrades, exploring innovative technologies, and investing in energy-efficient equipment to consistently drive down energy consumption and emissions.

 

2. Partnerships and Collaborations: Forming strategic partnerships with industry experts and suppliers to explore new sustainable solutions and integrate cutting-edge technologies into our operations.

 

3. Sustainability Goals: Setting ambitious yet achievable energy efficiency targets aligned with global sustainability frameworks, demonstrating our commitment to environmental responsibility.

 

Statement of directors' responsibilities

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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

KHAN INVESTMENTS HOLDINGS LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
- 8 -
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 auditor of the company 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 auditor of the company is aware of that information.

On behalf of the board
Mr Ashfaq Khan
Director
20 February 2025
KHAN INVESTMENTS HOLDINGS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF KHAN INVESTMENTS HOLDINGS LTD
- 9 -
Opinion

We have audited the financial statements of Khan Investments Holdings Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 May 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

KHAN INVESTMENTS HOLDINGS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KHAN INVESTMENTS HOLDINGS LTD
- 10 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent 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 parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the company and industry, we identified that the principal risks of non -compliance with laws and regulations related to pensions legislation, UK tax legislation and UK employment legislation, and we considered the extent to which non- compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to increase revenue or manipulate expenditure and management bias in accounting estimates. Audit procedures performed by the audit engagement team included:

 

•    Discussions with management, including consideration of known or suspected instances of non- compliance with laws and regulation and fraud;

•    Review of the financial statement disclosures to underlying supporting documentation;

•    Challenging assumptions and judgements made by management in their significant accounting estimates;

•    Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations or posted by senior management.

 

There are inherent limitations in the audit procedures described above and the further removed non- compliance with laws and regulations is from the events and transaction reflected in the financial statements, the less likely we would become aware of it. 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.

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.

KHAN INVESTMENTS HOLDINGS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KHAN INVESTMENTS HOLDINGS LTD
- 11 -

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.

Mr David Clegg BFP FCA (Senior Statutory Auditor)
For and on behalf of AMS Accountants Corporate Ltd, Statutory Auditor
Chartered Accountants
Floor 2
9 Portland Street
Manchester
M1 3BE
20 February 2025
KHAN INVESTMENTS HOLDINGS LTD
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 MAY 2024
- 12 -
2024
2023
as restated
Notes
£
£
Turnover
3
54,467,419
54,041,407
Cost of sales
(46,622,801)
(46,433,977)
Gross profit
7,844,618
7,607,430
Distribution costs
(1,480,746)
(1,514,470)
Administrative expenses
(4,688,365)
(4,612,631)
Other operating income
153
-
Operating profit
4
1,675,660
1,480,329
Interest payable and similar expenses
8
(938,701)
(759,390)
Profit before taxation
736,959
720,939
Tax on profit
9
(184,330)
(1,876,023)
Profit/(loss) for the financial year
25
552,629
(1,155,084)
Profit/(loss) for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.

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

KHAN INVESTMENTS HOLDINGS LTD
GROUP BALANCE SHEET
AS AT
30 MAY 2024
30 May 2024
- 13 -
2024
2023
as restated
Notes
£
£
£
£
Fixed assets
Intangible assets
11
9,709
-
Tangible assets
12
805,739
863,599
Investment property
13
19,588,355
19,452,013
20,403,803
20,315,612
Current assets
Stocks
17
3,051,575
2,884,045
Debtors
18
4,871,596
4,437,151
Cash at bank and in hand
5,927,460
5,634,630
13,850,631
12,955,826
Creditors: amounts falling due within one year
19
(7,634,217)
(7,727,331)
Net current assets
6,216,414
5,228,495
Total assets less current liabilities
26,620,217
25,544,107
Creditors: amounts falling due after more than one year
20
(8,080,802)
(7,544,534)
Provisions for liabilities
Deferred tax liability
22
3,768,855
3,781,642
(3,768,855)
(3,781,642)
Net assets
14,770,560
14,217,931
Capital and reserves
Called up share capital
24
200
200
Profit and loss reserves
25
14,770,360
14,217,731
Total equity
14,770,560
14,217,931
The financial statements were approved by the board of directors and authorised for issue on 20 February 2025 and are signed on its behalf by:
20 February 2025
Mr Ashfaq Khan
Director
Company registration number 08016159 (England and Wales)
KHAN INVESTMENTS HOLDINGS LTD
COMPANY BALANCE SHEET
AS AT 30 MAY 2024
30 May 2024
- 14 -
2024
2023
as restated
Notes
£
£
£
£
Fixed assets
Intangible assets
11
9,709
-
0
Investments
14
858,686
858,686
868,395
858,686
Current assets
Debtors
18
7,273,820
6,638,351
Cash at bank and in hand
1,279,433
1,465,816
8,553,253
8,104,167
Creditors: amounts falling due within one year
19
(1,310,775)
(1,537,095)
Net current assets
7,242,478
6,567,072
Total assets less current liabilities
8,110,873
7,425,758
Creditors: amounts falling due after more than one year
20
(6,156,047)
(5,463,179)
Net assets
1,954,826
1,962,579
Capital and reserves
Called up share capital
24
200
200
Profit and loss reserves
25
1,954,626
1,962,379
Total equity
1,954,826
1,962,579

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £7,753 (2023 - £52,966 loss).

The financial statements were approved by the board of directors and authorised for issue on 20 February 2025 and are signed on its behalf by:
20 February 2025
Mr Ashfaq Khan
Director
Company registration number 08016159 (England and Wales)
KHAN INVESTMENTS HOLDINGS LTD
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 MAY 2024
- 15 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
As restated for the period ended 30 May 2023:
Balance at 31 May 2022
200
15,404,815
15,405,015
Year ended 30 May 2023:
Loss and total comprehensive income
-
(1,155,084)
(1,155,084)
Dividends
10
-
(32,000)
(32,000)
Balance at 30 May 2023
200
14,217,731
14,217,931
Year ended 30 May 2024:
Profit and total comprehensive income
-
552,629
552,629
Balance at 30 May 2024
200
14,770,360
14,770,560
KHAN INVESTMENTS HOLDINGS LTD
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 MAY 2024
- 16 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
As restated for the period ended 30 May 2023:
Balance at 31 May 2022
200
2,047,345
2,047,545
Year ended 30 May 2023:
Loss and total comprehensive income for the year
-
(52,966)
(52,966)
Dividends
10
-
(32,000)
(32,000)
Balance at 30 May 2023
200
1,962,379
1,962,579
Year ended 30 May 2024:
Profit and total comprehensive income
-
(7,753)
(7,753)
Balance at 30 May 2024
200
1,954,626
1,954,826
KHAN INVESTMENTS HOLDINGS LTD
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 MAY 2024
- 17 -
2024
2023
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
30
1,899,433
486,868
Interest paid
(938,701)
(759,390)
Income taxes paid
(250,640)
(96,381)
Net cash inflow/(outflow) from operating activities
710,092
(368,903)
Investing activities
Purchase of intangible assets
(9,750)
-
Purchase of tangible fixed assets
(105,438)
(231,170)
Proceeds from disposal of tangible fixed assets
-
299
Purchase of investment property
(136,342)
(139,812)
Proceeds from disposal of investment property
-
43,000
Loans made to other entities
-
1,813
Net cash used in investing activities
(251,530)
(325,870)
Financing activities
Repayment of bank loans
(165,732)
(180,256)
Dividends paid to equity shareholders
-
(32,000)
Net cash used in financing activities
(165,732)
(212,256)
Net increase/(decrease) in cash and cash equivalents
292,830
(907,029)
Cash and cash equivalents at beginning of year
5,634,630
6,541,659
Cash and cash equivalents at end of year
5,927,460
5,634,630
KHAN INVESTMENTS HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 MAY 2024
- 18 -
1
Accounting policies
Company information

Khan Investments Holdings Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 2nd Floor, 9 Portland Street, Manchester, M1 3BE.

 

The group consists of Khan Investments Holdings Ltd and all of its subsidiaries.

1.1
Accounting convention

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

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

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

The 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 for parent company information presented within the consolidated financial statements:

 

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

KHAN INVESTMENTS HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
1
Accounting policies
(Continued)
- 19 -
1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Khan Investments Holdings Ltd together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 30 May 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

 

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

 

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

1.4
Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.5
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

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.

KHAN INVESTMENTS HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
1
Accounting policies
(Continued)
- 20 -
1.6
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 5 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.7
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

Patents & licences
3.33% straight line
1.8
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:

Leasehold land and buildings
10% straight line
Plant and equipment
15% reducing balance and 15% - 25% straight line
Fixtures and fittings
15% reducing balance and 25% straight line
Motor vehicles
25% reducing balance and 25% straight line

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 recognised in the profit and loss account.

1.9
Investment property

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

Property rented to a group entity is accounted for at fair value with changes in fair value recognised in profit or loss.

 

KHAN INVESTMENTS HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
1
Accounting policies
(Continued)
- 21 -
1.10
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

 

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

 

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.11
Impairment of fixed assets

At each reporting period end date, the group 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.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

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.

KHAN INVESTMENTS HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
1
Accounting policies
(Continued)
- 22 -

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.

1.12
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

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

1.13
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.

1.14
Financial instruments

The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and 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.

KHAN INVESTMENTS HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
1
Accounting policies
(Continued)
- 23 -
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 group 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 group 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.

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.

KHAN INVESTMENTS HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
1
Accounting policies
(Continued)
- 24 -
Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.15
Equity instruments

Equity instruments issued by the group 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 group.

1.16
Derivatives

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

 

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.

1.17
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 group’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 if, and only if, there is 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.

1.18
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.

KHAN INVESTMENTS HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
1
Accounting policies
(Continued)
- 25 -
1.19
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.20
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 leased asset are consumed.

1.21
Foreign exchange

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

1.22

Subsidiary undertakings exempt from audit

Under Section 479a of the Companies Act 2006 available to subsidiary undertakings, the company provides a guarantee in respect of the below subsidiary undertakings claiming exemption from audit.

 

The Pentagon Food Group Limited (03943556)

Khan Estates Limited (08373027)

PFG Group Limited (09125954)

2
Judgements and key sources of estimation uncertainty

In the application of the group’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.

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.

Deferred Taxation on Investment Property Revaluation

In line with the requirements of FRS102, the revaluation of investment properties requires a corresponding deferred tax liability. This is an estimate of the expected tax liability on the sale of the properties. This is reviewed annually to ensure that it is at the effective tax rate expected at the date of sale. As a result of the changes in the corporation tax rate effective 1st April 2023, there has been an adjustment to the deferred tax liability in the prior year period.

Investment Property Valuation

The fair value of investment properties is based on property valuations by the directors which are derived from a number of assumptions and the general strength of the property market and the wider economy. Significant changes to any of these factors may affect the fair value of the properties either in a negative or positive manner. The directors are satisfied at the year end that the market value of the investment properties remains appropriate.

KHAN INVESTMENTS HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
- 26 -
3
Turnover

An analysis of the group's turnover is as follows:

2024
2023
£
£
Turnover analysed by class of business
Wholesale goods
53,610,762
52,960,784
Rental income from investment properties
856,657
1,080,623
54,467,419
54,041,407
2024
2023
£
£
Turnover analysed by geographical market
UK
54,467,419
54,041,407
4
Operating profit
2024
2023
£
£
Operating profit for the year is stated after charging:
Depreciation of owned tangible fixed assets
163,298
179,095
(Profit)/loss on disposal of tangible fixed assets
-
42,937
Amortisation of intangible assets
41
104,876
Operating lease charges
43,815
15,864
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
18,750
15,000
6
Employees

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

Group
Company
2024
2023
2024
2023
Number
Number
Number
Number
Directors
3
4
3
4
Distribution and administration
84
84
-
-
Total
87
88
3
4
KHAN INVESTMENTS HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
6
Employees
(Continued)
- 27 -

Their aggregate remuneration comprised:

Group
Company
2024
2023
2024
2023
£
£
£
£
Wages and salaries
2,442,992
2,140,781
-
0
-
0
Social security costs
214,829
184,408
-
-
Pension costs
33,192
32,637
-
0
-
0
2,691,013
2,357,826
-
0
-
0
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
69,864
51,199
8
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
194,270
142,317
Other interest on financial liabilities
728,868
614,885
Interest on finance leases and hire purchase contracts
15,563
876
Other interest
-
1,312
Total finance costs
938,701
759,390
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
197,117
1,283,558
Adjustments in respect of prior periods
-
(45,240)
Total current tax
197,117
1,238,318
Deferred tax
Origination and reversal of timing differences
(12,787)
49,353
Changes in tax rates
-
588,352
Total deferred tax
(12,787)
637,705
Total tax charge
184,330
1,876,023
KHAN INVESTMENTS HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
9
Taxation
(Continued)
- 28 -

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
736,959
720,939
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
184,240
136,978
Tax effect of expenses that are not deductible in determining taxable profit
105
19,164
Adjustments in respect of prior years
-
(45,240)
Effect of change in corporation tax rate
-
8,137
Permanent capital allowances in excess of depreciation
2
(53,372)
Depreciation on assets not qualifying for tax allowances
10,483
35,361
Amortisation on assets not qualifying for tax allowances
(10,500)
18,592
Deferred tax adjustments in respect of prior years
-
(23,475)
Change in deferred tax due to a change in tax rate
-
1,779,878
Taxation charge
184,330
1,876,023

The standard rate of tax applied to deferred taxation balances is 25% (2023 - 25%). The applicable tax rate has changed following the substantive enactment of the Finance Act 2021.

10
Dividends
2024
2023
Recognised as distributions to equity holders:
£
£
Final paid
-
32,000
11
Intangible fixed assets
Group
Goodwill
Patents & licences
Total
£
£
£
Cost
At 31 May 2023
933,905
-
933,905
Additions
-
9,750
9,750
At 30 May 2024
933,905
9,750
943,655
Amortisation and impairment
At 31 May 2023
933,905
-
933,905
Amortisation charged for the year
-
41
41
At 30 May 2024
933,905
41
933,946
KHAN INVESTMENTS HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
11
Intangible fixed assets
(Continued)
- 29 -
Carrying amount
At 30 May 2024
-
9,709
9,709
At 30 May 2023
-
-
-
Company
Patents & licences
£
Cost
At 31 May 2023
-
0
Additions
9,750
At 30 May 2024
9,750
Amortisation and impairment
At 31 May 2023
-
0
Amortisation charged for the year
41
At 30 May 2024
41
Carrying amount
At 30 May 2024
9,709
At 30 May 2023
-
0
KHAN INVESTMENTS HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
- 30 -
12
Tangible fixed assets
Group
Leasehold land and buildings
Assets under construction
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 31 May 2023
332,483
96,724
341,265
792,907
280,130
1,843,509
Additions
-
37,865
20,576
46,997
-
105,438
At 30 May 2024
332,483
134,589
361,841
839,904
280,130
1,948,947
Depreciation and impairment
At 31 May 2023
190,224
-
134,914
527,128
127,644
979,910
Depreciation charged in the year
47,659
-
36,178
44,326
35,135
163,298
At 30 May 2024
237,883
-
171,092
571,454
162,779
1,143,208
Carrying amount
At 30 May 2024
94,600
134,589
190,749
268,450
117,351
805,739
At 30 May 2023
142,259
96,724
206,351
265,779
152,486
863,599
The company had no tangible fixed assets at 30 May 2024 or 30 May 2023.
13
Investment property
Group
Company
2024
2024
£
£
Fair value
At 31 May 2023 and 30 May 2024
19,452,013
-
Additions through external acquisition
136,342
-
At 30 May 2024
19,588,355
-

Investment property comprises freehold land and buildings. The fair value of the investment property has been arrived at on the basis of a valuation carried out in May 2022 by Registered Chartered Surveyors, who are not connected with the company on an open market basis by reference to market evidence of similar property valuations.

 

Between valuations the Directors review the properties for indicators of impairment or significant increase in value based on property indices.

KHAN INVESTMENTS HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
13
Investment property
(Continued)
- 31 -
If investment properties were stated on an historical cost basis rather than a fair value basis, the amounts would have been included as follows:
Group
Company
2024
2023
2024
2023
£
£
£
£
Cost
5,278,702
5,142,360
-
-
Accumulated depreciation
-
-
-
-
Carrying amount
5,278,702
5,142,360
-
-
14
Fixed asset investments
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Investments in subsidiaries
15
-
-
858,686
858,686
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 31 May 2023 and 30 May 2024
858,686
Carrying amount
At 30 May 2024
858,686
At 30 May 2023
858,686
15
Subsidiaries

Details of the company's subsidiaries at 30 May 2024 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
Khan Estates Limited
UK
Ordinary shares
100.00
-
PFG Group Limited
UK
Ordinary shares
100.00
-
The Pentagon Food Group Limited
UK
Ordinary shares
-
100.00

The investments in subsidiaries are all stated at cost.

 

The registered office address for all subsidiaries is the same as that of the company.

KHAN INVESTMENTS HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
- 32 -
16
Financial instruments
Group
Company
2024
2023
2024
2023
£
£
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
4,823,372
4,437,151
n/a
n/a
Carrying amount of financial liabilities
Measured at amortised cost
15,435,407
15,011,592
n/a
n/a
17
Stocks
Group
Company
2024
2023
2024
2023
£
£
£
£
Finished goods and goods for resale
3,051,575
2,884,045
-
0
-
0
18
Debtors
Group
Company
2024
2023
2024
2023
Amounts falling due within one year:
£
£
£
£
Trade debtors
2,662,766
2,302,040
58,300
61,599
Amounts owed by group undertakings
-
-
5,194,885
4,458,877
Other debtors
2,195,923
2,135,111
2,020,635
2,117,875
Prepayments and accrued income
12,907
-
-
0
-
0
4,871,596
4,437,151
7,273,820
6,638,351
19
Creditors: amounts falling due within one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Bank loans
21
174,125
183,257
-
0
-
0
Trade creditors
5,953,950
5,962,732
-
0
(886)
Amounts owed to group undertakings
-
-
139,900
270,000
Corporation tax payable
109,571
163,094
-
0
-
0
Other taxation and social security
170,041
97,179
-
0
(325)
Other creditors
1,189,111
1,284,721
1,167,875
1,261,106
Accruals and deferred income
37,419
36,348
3,000
7,200
7,634,217
7,727,331
1,310,775
1,537,095
KHAN INVESTMENTS HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
- 33 -
20
Creditors: amounts falling due after more than one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Bank loans and overdrafts
21
1,924,755
2,081,355
-
0
-
0
Other creditors
6,156,047
5,463,179
6,156,047
5,463,179
8,080,802
7,544,534
6,156,047
5,463,179
Amounts included above which fall due after five years are as follows:
Payable by instalments
1,094,716
2,212,479
-
910,530
21
Loans and overdrafts
Group
Company
2024
2023
2024
2023
£
£
£
£
Bank loans
2,098,880
2,264,612
-
0
-
0
Payable within one year
174,125
183,257
-
0
-
0
Payable after one year
1,924,755
2,081,355
-
0
-
0

Borrowings are secured by an unlimited debenture incorporating a fixed and floating charge, in addition to first legal charges over all investment properties owned in favour of Lloyds PLC.

The company has five loan facilities, below are the terms of each facility:

 

The company has 4 bank loans:

 

Bank loan 1 is capital repayment, interest payable at a fixed rate of 2.3% over Base Rate with a term expiring in October 2033.

 

Bank loans 2-4 are capital repayment, interest payable at a fixed rate of 2.5% with a term expiring in May 2026.

 

Other loans are subject to a fixed interest rate of 12% per annum. For the term of the loan the repayment is interest only, with the term expiring June 2030.

KHAN INVESTMENTS HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
- 34 -
22
Deferred taxation

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

Liabilities
Liabilities
2024
2023
Group
£
£
Accelerated capital allowances
191,330
204,202
Fair value adjustments
3,577,525
3,577,440
3,768,855
3,781,642
The company has no deferred tax assets or liabilities.
Group
Company
2024
2024
Movements in the year:
£
£
Liability at 31 May 2023
3,781,642
-
Credit to profit or loss
(12,787)
-
Liability at 30 May 2024
3,768,855
-
23
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
33,192
32,637

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

24
Share capital
Group and company
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
200
200
200
200
25
Reserves
KHAN INVESTMENTS HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
25
Reserves
(Continued)
- 35 -
Profit and loss reserves

The profit and loss account is the cumulative retained earnings of the company comprising of both distributable and non-distributable reserves.

 

At the year end £13,773,773 retained earnings relates to a fair value gain on investment properties in a prior year.

26
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2024
2023
2024
2023
£
£
£
£
Within one year
130,235
70,703
-
-
Between two and five years
172,232
211,392
-
-
302,467
282,095
-
-
27
Related party transactions
Transactions with related parties

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

Sales
Sales
Purchases
Purchases
2024
2023
2024
2023
£
£
£
£
Group
Other related parties
182,841
4,716
671,476
182,716

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2024
2023
£
£
Group
Other related parties
383,297
305,569

The following amounts were outstanding at the reporting end date:

Amounts due from related parties
2024
2023
Balance
Balance
£
£
KHAN INVESTMENTS HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
27
Related party transactions
(Continued)
- 36 -
Company
Other related parties
2,020,635
2,020,635
Other information

The company has taken advantage of FRS 102, section 33.1A available for transactions with wholly owned subsidiaries, and has chosen not to disclose related party transactions within the group.

 

Amounts due from and to related parties are owed from companies which have common directorship or common shareholding. These amounts are interest free, with no security and are repayable on demand.

 

Key management personnel is deemed to be the same individuals as the directors and this information is disclosed in note 7.

28
Directors' transactions

Dividends totalling £0 (2023 - £32,000) were paid in the year in respect of shares held by the company's directors.

At the year end, a balance of £1,108,144 (2023: £1,201,376) was due to the directors.

 

At the year end, a balance of £9,098 (2023: £9,098) was due from the directors.

 

The above balance is interest free with no fixed date for repayment.

29
Controlling party

The company was not under the control of a single shareholder at any point during the current or previous period.

The group was not under the control of a single shareholder at any point during the current or previous period.

KHAN INVESTMENTS HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
- 37 -
30
Cash generated from group operations
2024
2023
£
£
Profit/(loss) after taxation
552,629
(1,155,084)
Adjustments for:
Taxation charged
184,330
1,876,023
Finance costs
938,701
759,390
(Gain)/loss on disposal of tangible fixed assets
-
42,937
Amortisation and impairment of intangible assets
41
104,876
Depreciation and impairment of tangible fixed assets
163,298
179,095
Movements in working capital:
(Increase)/decrease in stocks
(167,530)
204,123
Increase in debtors
(426,633)
(2,517,689)
Increase in creditors
654,597
993,197
Cash generated from operations
1,899,433
486,868
31
Analysis of changes in net funds - group
31 May 2023
Cash flows
30 May 2024
£
£
£
Cash at bank and in hand
5,634,630
292,830
5,927,460
Borrowings excluding overdrafts
(2,264,612)
165,732
(2,098,880)
3,370,018
458,562
3,828,580
32
Prior period adjustment
Reconciliation of changes in equity - group
31 May
30 May
2022
2023
£
£
Adjustments to prior year
Deferred Taxation adjustment on the Fair Value of Investment Property
-
(1,118,698)
Equity as previously reported
15,405,015
15,336,629
Equity as adjusted
15,405,015
14,217,931
Analysis of the effect upon equity
Profit and loss reserves
-
(1,118,698)
KHAN INVESTMENTS HOLDINGS LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 MAY 2024
32
Prior period adjustment
(Continued)
- 38 -
Reconciliation of changes in loss for the previous financial period
2023
£
Adjustments to prior year
Deferred Taxation adjustment on the Fair Value of Investment Property
(1,118,698)
Loss as previously reported
(36,386)
Loss as adjusted
(1,155,084)
Reconciliation of changes in equity - company
The prior period adjustments do not give rise to any effect upon equity.
Reconciliation of changes in loss for the previous financial period
2023
£
Adjustments to prior year
Total adjustments
-
Loss as previously reported
(52,966)
Loss as adjusted
(52,966)
Notes to reconciliation

The financial statements for the year ended 30 May 2023 in Khan Estates Limited and consequently the consolidated accounts of Khan Investment Holdings Ltd did not include the total deferred taxation of the fair value uplift of investment property that is required under FRS 102.

 

As a result, the comparative for deferred taxation has increased by £1,118,698 at 30 May 2023.

 

The impact of this prior year adjustment was to increase the deferred taxation liability by £1,118,698 and to decrease reserves by £1,118,698.

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