Company registration number SC217157 (Scotland)
KEITH BUILDERS MERCHANTS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
KEITH BUILDERS MERCHANTS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Independent auditor's report
3 - 5
Statement of comprehensive income
6
Balance sheet
7
Statement of changes in equity
8
Notes to the financial statements
9 - 22
KEITH BUILDERS MERCHANTS LIMITED
COMPANY INFORMATION
Directors
J J Smith
K A Mitchell
M J Lapka
(Appointed 6 December 2024)
L R Davidson
(Appointed 6 December 2024)
Company number
SC217157
Registered office
9 Edindiach Road
Keith
Scotland
AB55 5JY
Auditor
AAB Audit & Accountancy Limited
Kingshill View
Prime Four Business Park
Kingswells
ABERDEEN
United Kingdom
AB15 8PU
KEITH BUILDERS MERCHANTS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2025

The directors present the strategic report for the year ended 31 August 2025.

Principal activities

The principal activity of the company is that of builders merchants as well as the design and sale of kitchens and bathrooms. The company has two main branches in Keith and Forres and are well placed to service the local area.

Business review

The directors are satisfied with the results presented in these financial statements, in what was a challenging year. Trading performance was strong in the first half of the year, but was impacted towards the end of the year by the increasing inflation rates and general uncertainty around the economy.

Principal risks and uncertainties

The company operates in the North East of Scotland. Trading levels are impacted by local construction activity, which is heavily impacted by the local economy. The customer base includes small and medium sized businesses as well as private individuals, and does not rely heavily on one type of customer or any one major customer, which reduces market risk. This therefore lowers the risk of any significant loss of revenue and lowers the risk of bad debts, since there is no reliance upon one single customer.

The trading levels in the current year have been slightly impacted by global supply chain issues and the increasing inflation which was experienced during the year. The directors recognise the risks surrounding the supply chain but are not heavily reliant upon any one supplier or region, which reduces this risk.

Financial key performance indicators

The directors consider the financial key performance indicators to be turnover as well as gross profit and net profit. These metrics of business performance are measured by branch as well as on an overall company level.

Other key performance indicators

Other key performance indicators include staff retention and customer retention. Keith Builders Merchants pride themselves on a high level of long standing customers.

On behalf of the board

J J SMITH
J J Smith
Director
17 April 2026
- 1 -
KEITH BUILDERS MERCHANTS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2025

The directors present their annual report and financial statements for the year ended 31 August 2025.

Results and dividends

The results for the year are set out on page 6.

Ordinary dividends were paid amounting to £60,000. The directors do not recommend payment of a further dividend.

Directors

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

J J Smith
K A Mitchell
M J Lapka
(Appointed 6 December 2024)
L R Davidson
(Appointed 6 December 2024)
Auditor

The auditors, AAB Audit & Accountancy Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

Medium-sized companies exemption

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

On behalf of the board
J J SMITH
J J Smith
Director
17 April 2026
- 2 -
KEITH BUILDERS MERCHANTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF KEITH BUILDERS MERCHANTS LIMITED
Opinion
- 3 -

We have audited the financial statements of Keith Builders Merchants Limited (the 'company') for the year ended 31 August 2025 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 31 August 2025 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Other information

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

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

- the information given in the strategic report and the directors' r eport for the financial year for which the financial statements are prepared is consistent with the financial statements; and

- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

KEITH BUILDERS MERCHANTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF KEITH BUILDERS MERCHANTS LIMITED (CONTINUED)
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 identifie d material misstatements in the strategic report or the directors' r eport.

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 directors' remuneration specified by law are not made; or

- we have not received all the information and explanations we require for our audit.

Responsibilities of directors
- 4 -

As explained more fully in the directors' r esponsibilities s tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

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

We obtained an understanding of the legal and regulatory frameworks within which the company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements.

The laws and regulations we considered in this context were the Companies Act 2006 and Taxation legislation.

We identified the greatest risk of material impact on the financial statements from irregularities including fraud to be:

- Management override of controls to manipulate the company’s key performance indicators to meet targets

- Timing and completeness of revenue recognition

- Management judgement applied in calculating provisions

- Compliance with relevant laws and regulations which directly impact the financial statements and those that the company needs to comply with for the purpose of trading.

KEITH BUILDERS MERCHANTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF KEITH BUILDERS MERCHANTS LIMITED (CONTINUED)

Our audit procedures to respond to these risks included:

- Testing of journal entries and other adjustments for appropriateness

- Evaluating the business rationale of significant transactions outside the normal course of business

- Reviewing a sample of sales and purchases around the year end to ensure income and costs have been recorded accurately in the correct period

- Reviewing a sample of sales and purchases transactions

- Reviewing judgments made by management in their calculation of accounting estimates for potential management bias

- Enquiries of management about litigation and claims and inspection of relevant correspondence

- Reviewing legal and professional fees to identify indications of actual or potential litigation, claims and any non-compliance with laws and regulations

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.

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.

AAB AUDIT & ACCOUNTANCY LIMITED
Derek Mair (Senior Statutory Auditor)
For and on behalf of AAB Audit & Accountancy Limited, Statutory Auditor
Statutory Auditor
- 5 -
Kingshill View
Prime Four Business Park
Kingswells
ABERDEEN
United Kingdom
AB15 8PU
17 April 2026
KEITH BUILDERS MERCHANTS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2025
2025
2024
Notes
£
£
Turnover
3
10,101,270
10,290,283
Cost of sales
(8,208,520)
(8,320,731)
Gross profit
1,892,750
1,969,552
Administrative expenses
(2,949,963)
(2,773,937)
Other operating income
1,114,128
1,139,035
Operating profit
4
56,915
334,650
Interest receivable and similar income
7
8,558
-
0
Interest payable and similar expenses
8
(9,368)
(9,362)
Profit before taxation
56,105
325,288
Tax on profit
9
(17,194)
(96,969)
Profit for the financial year
38,911
228,319

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

- 6 -
KEITH BUILDERS MERCHANTS LIMITED
BALANCE SHEET
AS AT
31 AUGUST 2025
31 August 2025
2025
2024
Notes
£
£
£
£
Fixed assets
Tangible assets
11
453,957
349,919
Investments
12
900
900
454,857
350,819
Current assets
Stocks
13
1,365,887
1,379,931
Debtors
14
4,193,052
4,523,565
Cash at bank and in hand
719,648
685,249
6,278,587
6,588,745
Creditors: amounts falling due within one year
15
(2,968,212)
(3,281,778)
Net current assets
3,310,375
3,306,967
Total assets less current liabilities
3,765,232
3,657,786
Creditors: amounts falling due after more than one year
16
(143,339)
(30,101)
Provisions for liabilities
Deferred tax liability
17
74,903
59,606
(74,903)
(59,606)
Net assets
3,546,990
3,568,079
Capital and reserves
Called up share capital
63,158
63,158
Share premium account
4,421
4,421
Revaluation reserve
117,252
117,252
Profit and loss reserves
3,362,159
3,383,248
Total equity
3,546,990
3,568,079

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

The financial statements were approved by the board of directors and authorised for issue on 17 April 2026 and are signed on its behalf by:
J J SMITH
J J Smith
Director
Company registration number SC217157 (Scotland)
- 7 -
KEITH BUILDERS MERCHANTS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2025
Share capital
Share premium account
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 September 2023
63,158
4,421
117,252
3,299,929
3,484,760
Year ended 31 August 2024:
Profit and total comprehensive income
-
-
-
228,319
228,319
Dividends
-
-
-
(145,000)
(145,000)
Balance at 31 August 2024
63,158
4,421
117,252
3,383,248
3,568,079
Year ended 31 August 2025:
Profit and total comprehensive income
-
-
-
38,911
38,911
Dividends
-
-
-
(60,000)
(60,000)
Balance at 31 August 2025
63,158
4,421
117,252
3,362,159
3,546,990
- 8 -
KEITH BUILDERS MERCHANTS LIMITED
STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
1
Judgements and key sources of estimation uncertainty

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported during the year for revenue and costs. However, the nature of estimation means that actual outcomes could differ from those estimates. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The following judgements and estimates have had the most significant impact on amounts recognised in the financial statements:

Stock valuation

Management use their judgement to determine whether the value of stock held is appropriately held at cost, or whether it requires impairment to bring down the value to the net realisable value.

Useful economic lives of tangible assets

The annual depreciation charge for tangible assets is sensitive to changes in the useful economic lives and residual values of the assets. Useful lives and residual values are reassessed annually by management to ensure appropriate. They are assessed where necessary to reflect current estimates based on economic utilisation and physical condition.

2
Accounting policies
Company information

Keith Builders Merchants Limited is a private company limited by shares incorporated in Scotland. The registered office is 9 Edindiach Road, Keith, Scotland, AB55 5JY.

2.1
Basis of preparation

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 a mounts 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.

- 9 -
KEITH BUILDERS MERCHANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2025
2
Accounting policies
(Continued)

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. T he company has therefore taken advantage of e xemptions from the following disclosure requirements:

- Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

- Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

- Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

- Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of KBM 2018 Limited. These consolidated financial statements are available from its registered office,

2.2
Going concern

The directors, having made due and careful enquiry, are of the opinion that the company has adequate working capital to execute its operations over the next 12 months. The directors, therefore, have made an informed judgement, at the time of approving the financial statements, that there is a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.true

As a result, the directors have continued to adopt the going concern basis of accounting in preparing the annual financial statements.

2.3
Turnover
- 10 -

Revenue comprises sales of goods or services provided to customers net of value added tax and other sales taxes, less an appropriate deduction for actual and expected returns and discounts. Revenue is recognised when performance obligations are satisfied and the control of goods or services is transferred to the buyer. Where the performance obligation is satisfied over time, revenue is recognised in accordance with its progress towards complete satisfaction of that performance obligation.

When cash inflows are deferred and represent a financing arrangement, the promised consideration is adjusted for the effects of the time value of money, which is recognised as interest income.

The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:

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.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recover able.

KEITH BUILDERS MERCHANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
2
Accounting policies
(Continued)
2.4
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:

Computer software
3 years straight line
2.5
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:

Buildings
2% straight line
Property improvements
10% straight line
Motor vehicles and equipment
10%/25% straight line
Fixtures, fittings and computer equipment
15%/33% 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 credited or charged to profit or loss.

2.6
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. 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 company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

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

2.7
Impairment of fixed assets
- 11 -

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

KEITH BUILDERS MERCHANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
2
Accounting policies
(Continued)
- 12 -

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.

2.8
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.

2.9
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.

2.10
Financial instruments

The company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade debtors and creditors. These are measured at amortised cost and are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of comprehensive income.

Basic financial assets

The company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade debtors and creditors. These are measured at amortised cost and are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of comprehensive income.

KEITH BUILDERS MERCHANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
2
Accounting policies
(Continued)
Other financial assets
- 13 -

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 paymen ts 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. A m ounts 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.

KEITH BUILDERS MERCHANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
2
Accounting policies
(Continued)
Other financial liabilities
- 14 -

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 s ubsequently 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 th r ough 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.

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid.

2.11
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

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.

KEITH BUILDERS MERCHANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
2
Accounting policies
(Continued)
2.12
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

2.13
Retirement benefits

The company operates a defined contribution plan for it's employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations. The contributions are recognised as an expense in the Statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the company in independently administered funds.

2.14
Leases
As lessee

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 lease s asset are consumed.

2.15
Foreign exchange

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

3
Turnover and other revenue
2025
2024
£
£
Turnover analysed by class of business
Sale of goods
10,101,270
10,290,283
2025
2024
£
£
Turnover analysed by geographical market
United Kingdom
10,101,270
10,290,283
- 15 -
KEITH BUILDERS MERCHANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
3
Turnover and other revenue
(Continued)
2025
2024
£
£
Other revenue
Interest income
8,558
-
Rebates received
1,114,128
1,139,035
4
Operating profit
2025
2024
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
21,000
20,000
Depreciation of tangible fixed assets
184,849
183,293
(Profit)/loss on disposal of tangible fixed assets
(25,423)
10,734
Operating lease charges
233,670
217,672
5
Employees

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

2025
2024
Number
Number
39
42

Their aggregate remuneration comprised:

2025
2024
£
£
Wages and salaries
1,218,001
1,213,731
Social security costs
124,137
104,439
Pension costs
200,176
185,100
1,542,314
1,503,270
6
Directors' remuneration
2025
2024
£
£
Remuneration for qualifying services
257,727
190,725
Company pension contributions to defined contribution schemes
89,392
73,291
347,119
264,016
- 16 -
KEITH BUILDERS MERCHANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
6
Directors' remuneration
(Continued)
Remuneration disclosed above include the following amounts paid to the highest paid director:
2025
2024
£
£
Remuneration for qualifying services
102,721
101,227

During the year retirement benefits were accruing to 4 directors (202 4 - 2) in respect of defined contribution pension schemes.

7
Interest receivable and similar income
2025
2024
£
£
Interest income
Interest on bank deposits
8,558
-
0
8
Interest payable and similar expenses
2025
2024
£
£
Interest on finance leases and hire purchase contracts
9,368
9,396
Other interest
-
0
(34)
9,368
9,362
9
Taxation
2025
2024
£
£
Current tax
UK corporation tax on profits for the current period
1,904
137,375
Adjustments in respect of prior periods
(7)
(908)
Total current tax
1,897
136,467
Deferred tax
Origination and reversal of timing differences
15,297
(40,554)
Adjustment in respect of prior periods
-
0
1,056
Total deferred tax
15,297
(39,498)
Total tax charge
17,194
96,969
- 17 -
KEITH BUILDERS MERCHANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
9
Taxation
(Continued)

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:

2025
2024
£
£
Profit before taxation
56,105
325,288
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2024: 25.00%)
10,660
81,314
Tax effect of expenses that are not deductible in determining taxable profit
2,488
14,509
Adjustments in respect of prior years
(7)
1,056
Under/(over) provided in prior years
-
0
(908)
Fixed asset differences
381
998
Remeasurement of deferred tax for changes in tax rates
3,672
-
0
Taxation charge for the year
17,194
96,969
10
Intangible fixed assets
Computer software
£
Cost
At 1 September 2024 and 31 August 2025
65,032
Amortisation and impairment
At 1 September 2024 and 31 August 2025
65,032
Carrying amount
At 31 August 2025
-
0
At 31 August 2024
-
0
- 18 -
KEITH BUILDERS MERCHANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
11
Tangible fixed assets
Buildings
Property improvements
Motor vehicles and equipment
Fixtures, fittings and computer equipment
Total
£
£
£
£
£
Cost
At 1 September 2024
82,215
24,515
1,003,905
138,584
1,249,219
Additions
64,170
-
0
234,807
7,610
306,587
Disposals
-
0
-
0
(200,748)
-
0
(200,748)
At 31 August 2025
146,385
24,515
1,037,964
146,194
1,355,058
Depreciation and impairment
At 1 September 2024
37,817
24,515
747,333
89,635
899,300
Depreciation charged in the year
1,644
-
0
174,976
8,229
184,849
Eliminated in respect of disposals
-
0
-
0
(183,048)
-
0
(183,048)
At 31 August 2025
39,461
24,515
739,261
97,864
901,101
Carrying amount
At 31 August 2025
106,924
-
0
298,703
48,330
453,957
At 31 August 2024
44,398
-
0
256,572
48,949
349,919

Tangible fixed assets includes assets held under finance leases or hire purchase contracts, as follows:

2025
2024
£
£
Motor vehicles
286,673
214,466
12
Fixed asset investments
2025
2024
£
£
Unlisted investments
900
900

These investments represent minority interests in unlisted merchant buying groups and in the opinion of the directors their value at cost in the financial statements is a fair reflection of their worth.

13
Stocks
2025
2024
£
£
Finished goods and goods for resale
1,365,887
1,379,931

The difference between the purchase price or production costs of stock and their replacement cost is not material.

- 19 -
KEITH BUILDERS MERCHANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
14
Debtors
2025
2024
Amounts falling due within one year:
£
£
Trade debtors
1,282,764
1,289,571
Amounts owed by group undertakings
2,673,690
2,921,405
Other debtors
32,822
116,487
Prepayments and accrued income
203,776
196,102
4,193,052
4,523,565
15
Creditors: amounts falling due within one year
2025
2024
Notes
£
£
Obligations under finance leases
18
46,301
61,314
Trade creditors
1,953,069
2,054,591
Corporation tax
17,252
137,375
Other taxation and social security
143,527
138,325
Other creditors
755,630
848,798
Accruals and deferred income
52,433
41,375
2,968,212
3,281,778

There is an unlimited cross company guarantee between Keith Builders Merchants and other companies in the group.

The company granted a Fixed and Floating charge over its assets in return for an invoice financing facility.

Obligations under hire purchase contracts are secured over the assets to which they relate

16
Creditors: amounts falling due after more than one year
2025
2024
Notes
£
£
Obligations under finance leases
18
143,339
30,101
17
Deferred taxation

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

Liabilities
Liabilities
2025
2024
Balances:
£
£
Timing differences
74,903
59,606
- 20 -
KEITH BUILDERS MERCHANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
17
Deferred taxation
(Continued)
2025
Movements in the year:
£
Liability at 1 September 2024
59,606
Charge to profit or loss
15,297
Liability at 31 August 2025
74,903

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

18
Finance lease obligations
2025
2024
Future minimum lease payments due under finance leases:
£
£
Within one year
46,301
61,314
In two to five years
50,033
30,101
In over five years
93,306
-
0
189,640
91,415
19
Retirement benefit schemes
2025
2024
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
200,176
185,100

The company contributes to a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

20
Security

There is an unlimited cross company guarantee between Keith Builders Merchants Limited and other companies in the group.

The company granted a Fixed and Floating Charge over its assets in return for bank borrowings. A standard security charge was given over the heritable property in favour of a commercial bank.

Obligations under hire purchase contracts are secured over the assets to which they relate.

- 21 -
KEITH BUILDERS MERCHANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2025
21
Operating lease commitments
As 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:

2025
2024
£
£
Within 1 year
36,230
37,028
Years 2-5
26,867
36,230
After 5 years
-
0
29,553
63,097
102,811
22
Ultimate controlling party

The company is a wholly owned subsidiary of KBM 2018 Limited, a company registered in the United Kingdom.

23
Related party transactions

Control

Throughout the current and previous year, the company was controlled by the directors.

The group has taken advantage of section 33 of FRS 102 which allows exemption from disclosure of true related party transactions between 100% owned group companies.

- 22 -
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