Company Registration No. 03545205 (England and Wales)
KMS (UK) LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
KMS (UK) LTD
COMPANY INFORMATION
Directors
Mrs M N Gates
Mr C Gates
Company number
03545205
Registered office
1st - 4th Floors
203 Victoria Street
London
SW1E 5NE
Auditor
Arram Berlyn Gardner LLP
30 City Road
London
EC1Y 2AB
KMS (UK) LTD
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Statement of financial position
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 20
KMS (UK) LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2017
- 1 -
The directors present the strategic report for the year ended 31 December 2017.
Fair review of the business
The performance of the business, despite the huge challenges presented by Brexit, remains consistent and robust.
The potentially negative overall effects of a “no deal” Brexit to the UK economy remains a direct concern to the business, as does a weak and divided Government and the lack of a credible opposition.
On the plus side, the slide in sterling means that the UK will continue to be a more attractive destination for visitors, with, it is hoped, a commensurate increase in hotel occupancy levels.
This provides the business with an opportunity to be highly selective in seeking prospective clients willing to trade at realistic market rates for the provision of housekeeping employees.
Therefore, future growth will be dependent on selecting the right clients to partner during a challenging period.
Principal risks and uncertainties
As a company with a large number of EU workers, the principal risk to the business remains the future status of these citizens as a result of Brexit, compounded with the possibility of EU workers not receiving preferential access.
There is likely to be upward pressure on wages within the hospitality supply sector as the employee recruitment market contracts. This will require careful planning and costing policies to ensure that that the company continues to attract the right candidates whilst maintaining acceptable margins and competitive pricing.
Key performance indicators
The directors consider sales, margin, overheads and EBITA to be the main financial performance indicators of the company.
Future Outlook
In the meantime, our priority is to maintain the highest levels of service to our loyal existing client base and retain our exiting workforce, through the continued ethical treatment of our employees, further investment in technology and the focus on excellent customer service.
Mr C Gates
Director
27 September 2018
KMS (UK) LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2017
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2017.
Principal activities
The principal activity of the company continued to be that of the provision of housekeeping services to the hospitality industry.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mrs M N Gates
Mr C Gates
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £410,000. The directors do not recommend payment of a final dividend.
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Employee involvement
The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.
Auditor
Arram Berlyn Gardner LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
KMS (UK) LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
- 3 -
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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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.
On behalf of the board
Mr C Gates
Director
27 September 2018
KMS (UK) LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF KMS (UK) LTD
- 4 -
Opinion
We have audited the financial statements of KMS (UK) Ltd (the 'company') for the year ended 31 December 2017 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 December 2017 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's
responsibilities for the audit of the financial statements
section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
KMS (UK) LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KMS (UK) LTD
- 5 -
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 and the directors'
r
eport
.
We have nothing to report in respect of the following matters where 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
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.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor’s report.
Other matters which we are required to address
In the previous accounting period the directors of the company took advantage of the audit exemption under s477 of the Companies Act. Therefore the prior period financial statements were not subject to an audit.
KMS (UK) LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KMS (UK) LTD
- 6 -
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.
John Donohoe FCA (Senior Statutory Auditor)
for and on behalf of Arram Berlyn Gardner LLP
27 September 2018
Chartered Accountants
Statutory Auditor
30 City Road
London
EC1Y 2AB
KMS (UK) LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2017
- 7 -
2017
2016
Notes
£
£
Turnover
3
12,072,971
10,332,137
Cost of sales
(10,942,183)
(9,384,257)
Gross profit
1,130,788
947,880
Administrative expenses
(569,097)
(653,687)
Operating profit
4
561,691
294,193
Interest receivable and similar income
8
7,816
133
Interest payable and similar expenses
9
-
(1,444)
Profit before taxation
569,507
292,882
Tax on profit
10
(120,000)
(60,436)
Profit for the financial year
449,507
232,446
The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.
KMS (UK) LTD
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2017
31 December 2017
- 8 -
2017
2016
Notes
£
£
£
£
Fixed assets
Tangible assets
12
3,854
5,468
Current assets
Debtors
14
1,785,556
1,610,203
Cash at bank and in hand
332,459
488,174
2,118,015
2,098,377
Creditors: amounts falling due within one year
15
(1,867,406)
(1,888,889)
Net current assets
250,609
209,488
Total assets less current liabilities
254,463
214,956
Capital and reserves
Called up share capital
18
100
100
Profit and loss reserves
19
254,363
214,856
Total equity
254,463
214,956
The financial statements were approved by the board of directors and authorised for issue on 27 September 2018 and are signed on its behalf by:
Mr C Gates
Director
Company Registration No. 03545205
KMS (UK) LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2017
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2016
100
252,410
252,510
Year ended 31 December 2016:
Profit and total comprehensive income for the year
-
232,446
232,446
Dividends
11
-
(270,000)
(270,000)
Balance at 31 December 2016
100
214,856
214,956
Year ended 31 December 2017:
Profit and total comprehensive income for the year
-
449,507
449,507
Dividends
11
-
(410,000)
(410,000)
Balance at 31 December 2017
100
254,363
254,463
KMS (UK) LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2017
- 10 -
2017
2016
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
22
1,205,527
(306,263)
Interest paid
-
(1,444)
Income taxes paid
(60,436)
(80,045)
Net cash inflow/(outflow) from operating activities
1,145,091
(387,752)
Investing activities
Purchase of tangible fixed assets
(768)
(2,173)
Interest received
7,816
133
Net cash generated from/(used in) investing activities
7,048
(2,040)
Financing activities
Dividends paid
(410,000)
(270,000)
Net cash used in financing activities
(410,000)
(270,000)
Net increase/(decrease) in cash and cash equivalents
742,139
(659,792)
Cash and cash equivalents at beginning of year
(414,612)
245,180
Cash and cash equivalents at end of year
327,527
(414,612)
Relating to:
Cash at bank and in hand
332,459
488,174
Bank overdrafts included in creditors payable within one year
(4,932)
(902,786)
KMS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
- 11 -
1
Accounting policies
Company information
KMS (UK) Ltd is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
1st - 4th Floors, 203 Victoria Street, London, SW1E 5NE.
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 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.
1.2
Going concern
A
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
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.
Invoices are raised on a weekly basis and an accrual is made at the year end for un-invoiced services that were rendered during the period.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold land and buildings
Over the lease term
Plant and equipment
20% 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
.
The assets’ residual values and useful lives are reviewed, and adjusted, if appropriate, at the end of each reporting period. The effect of any change is accounted for prospectively.
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
KMS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
1
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.
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.
1.6
Cash at bank and in hand
Cash at bank and in hand
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’
o
f FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
KMS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
1
Accounting policies
(Continued)
- 13 -
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.9
Taxation
The tax expense represents the sum of the tax currently payable
.
KMS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
1
Accounting policies
(Continued)
- 14 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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.
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to income 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 asset are consumed.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
2017
2016
£
£
Turnover analysed by class of business
Housekeeping
12,072,971
10,332,137
2017
2016
£
£
Other significant revenue
Interest income
7,816
133
KMS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
3
Turnover and other revenue
(Continued)
- 15 -
2017
2016
£
£
Turnover analysed by geographical market
UK
12,072,971
10,332,137
4
Operating profit
2017
2016
Operating profit for the year is stated after charging:
£
£
Depreciation of owned tangible fixed assets
2,382
3,178
Operating lease charges
57,260
28,062
5
Auditor's remuneration
2017
2016
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
8,750
-
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2017
2016
Number
Number
734
651
Their aggregate remuneration comprised:
2017
2016
£
£
Wages and salaries
10,432,044
9,172,607
Social security costs
640,612
550,686
Pension costs
87,150
46,831
11,159,806
9,770,124
KMS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
- 16 -
7
Directors' remuneration
2017
2016
£
£
Remuneration for qualifying services
16,320
140,000
8
Interest receivable and similar income
2017
2016
£
£
Interest income
Interest on bank deposits
-
133
Other interest income
7,816
-
Total income
7,816
133
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
-
133
9
Interest payable and similar expenses
2017
2016
£
£
Other finance costs:
Other interest
-
1,444
10
Taxation
2017
2016
£
£
Current tax
UK corporation tax on profits for the current period
120,000
60,436
UK Corporation tax rates were substantively enacted as part of the Finance Bill 2015 on 15 July 2015. This reduced the main rate to 19% from 1 April 2017. Further reductions to the UK Corporation tax rates were substantially enacted as part of the Finance Bill 2016 on 16 March 2016, and remain in place as part of Finance Bill 2017.
This will reduce the main rate to 17% on 1 April 2020.
KMS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
10
Taxation
(Continued)
- 17 -
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:
2017
2016
£
£
Profit before taxation
569,507
292,882
Expected tax charge based on the standard rate of corporation tax in the UK of 19.25% (2016: 20.00%)
109,630
58,576
Tax effect of expenses that are not deductible in determining taxable profit
10,954
2,295
Permanent capital allowances in excess of depreciation
(584)
(435)
Taxation charge for the year
120,000
60,436
11
Dividends
2017
2016
£
£
Interim paid
410,000
270,000
12
Tangible fixed assets
Leasehold land and buildings
Plant and equipment
Total
£
£
£
Cost
At 1 January 2017
5,016
56,006
61,022
Additions
-
768
768
At 31 December 2017
5,016
56,774
61,790
Depreciation and impairment
At 1 January 2017
5,016
50,538
55,554
Depreciation charged in the year
-
2,382
2,382
At 31 December 2017
5,016
52,920
57,936
Carrying amount
At 31 December 2017
-
3,854
3,854
At 31 December 2016
-
5,468
5,468
KMS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
- 18 -
13
Financial instruments
2017
2016
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
1,771,438
1,523,169
Carrying amount of financial liabilities
Measured at amortised cost
704,747
1,534,838
14
Debtors
2017
2016
Amounts falling due within one year:
£
£
Trade debtors
1,576,510
1,510,044
Other debtors
194,928
13,125
Prepayments and accrued income
14,118
87,034
1,785,556
1,610,203
15
Creditors: amounts falling due within one year
2017
2016
Notes
£
£
Bank loans and overdrafts
16
4,932
902,786
Trade creditors
11,889
10,816
Corporation tax
120,000
60,436
Other taxation and social security
1,042,659
293,615
Other creditors
408,817
425,129
Accruals and deferred income
279,109
196,107
1,867,406
1,888,889
Amounts owed under a debt financing arrangement are secured on the trade debtors of the company by way of a fixed and floating charge on all of the company's assets.
16
Loans and overdrafts
2017
2016
£
£
Bank overdrafts
4,932
902,786
Payable within one year
4,932
902,786
KMS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
- 19 -
17
Retirement benefit schemes
2017
2016
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
87,150
46,831
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
18
Share capital
2017
2016
£
£
Ordinary share capital
Issued and fully paid
100 Ordinary of £1 each
100
100
100
100
19
Profit and loss reserves
Retained earnings represents accumulated comprehensive income for the year and prior periods less dividends paid.
20
Operating lease commitments
Lessee
Operating lease payments represents rental
s
payable by the company for office premises. The lease is negotiated for a period of
3
years starting from
February 2017
and are fixed for a period of
3
years
.
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:
2017
2016
£
£
Within one year
52,500
5,014
Between two and five years
61,250
-
113,750
5,014
KMS (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2017
- 20 -
21
Directors' transactions
Dividends totalling £410,000 (2016 - £270,000) were paid in the year in respect of shares held by the company's directors.
The company has entered into
advances
for its directors as follows:
Description
% Rate
Opening balance
Amounts advanced
Interest charged
Amounts repaid
Closing balance
£
£
£
£
£
Directors
3.00
(1,998)
600,021
7,816
(424,556)
181,283
(1,998)
600,021
7,816
(424,556)
181,283
22
Cash generated from operations
2017
2016
£
£
Profit for the year after tax
449,507
232,446
Adjustments for:
Taxation charged
120,000
60,436
Finance costs
-
1,444
Investment income
(7,816)
(133)
Depreciation and impairment of tangible fixed assets
2,382
3,178
Movements in working capital:
(Increase) in debtors
(175,353)
(201,249)
Increase/(decrease) in creditors
816,807
(402,385)
Cash generated from/(absorbed by) operations
1,205,527
(306,263)
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