Company registration number 03917262 (England and Wales)
KIRLY GROUP HOLDINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
KIRLY GROUP HOLDINGS LIMITED
COMPANY INFORMATION
Directors
M W Johnson
M A Johnson
Secretary
M J Tolond
Company number
03917262
Registered office
11 Luard Road
Cambridge
CB2 8PJ
Auditor
Humphrey & Co Audit Services Ltd
7-9 The Avenue
Eastbourne
East Sussex
BN21 3YA
KIRLY GROUP HOLDINGS LIMITED
CONTENTS
Page
Directors' report
1
Directors' responsibilities statement
2
Independent auditor's report
3 - 5
Profit and loss account
6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 23
KIRLY GROUP HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 1 -
The directors present their annual report and financial statements for the year ended 31 December 2021.
Principal activities
The principal activity of the company continued to be that of the provision of central administration facilities and finance to its subsidiary companies.
Results and dividends
The results for the year are set out on page 6.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
M W Johnson
M A Johnson
Auditor
Humphrey & Co Audit Services Ltd were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Statement of 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
M W Johnson
Director
27 October 2022
KIRLY GROUP HOLDINGS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
KIRLY GROUP HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF KIRLY GROUP HOLDINGS LIMITED
- 3 -
Opinion
We have audited the financial statements of Kirly Group Holdings Limited (the 'company') for the year ended 31 December 2021 which comprise the profit and loss account, 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 December 2021 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.
We draw attention to note
2
to these financial statements which describes
the material uncertainties regarding deferred consideration to be received by the company.
Our opinion is not modified in this respect.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
KIRLY GROUP HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KIRLY GROUP HOLDINGS LIMITED
- 4 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the directors'
r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the directors' report has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in 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
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit; or
-
the directors were not entitled to take advantage of the small companies exemption from the requirement to prepare a strategic report.
Responsibilities of directors
As explained more fully in the directors'
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
.
KIRLY GROUP HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KIRLY GROUP HOLDINGS LIMITED
- 5 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
We obtained an understanding of the company and the laws and regulations that could reasonably be expected to have a direct effect on the financial statements through discussion with the directors and management and the application of our knowledge and experience. We discussed with management whether there were any known or suspected instances of fraud and/or non-compliance with relevant laws and regulations. We also obtained an understanding of the company's accounting systems and internal controls.
We audited the risk of management override of controls, by testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business. Our other audit procedures included, but were not limited to, carrying out detailed substantive testing of a sample of income and expenditure transactions arising in the year and a sample of balance sheet items such as fixed assets, debtors, creditors, etc. We also reviewed the financial statements and checked disclosures to supporting documentation to assess compliance with applicable law and regulation.
Because of the inherent risk 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. The 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 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.
Mr Andrew Robinson (Senior Statutory Auditor)
For and on behalf of Humphrey & Co Audit Services Ltd
28 October 2022
Chartered Accountants
Statutory Auditor
7-9 The Avenue
Eastbourne
East Sussex
BN21 3YA
KIRLY GROUP HOLDINGS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 6 -
2021
2020
Notes
£
£
Turnover
7,501
84,472
Administrative expenses
(375,885)
(219,336)
Other operating income
315,670
310,612
Operating (loss)/profit
4
(52,714)
175,748
Interest receivable and similar income
7
897,878
1,932,215
Interest payable and similar expenses
8
(256)
(4,382)
Gains/(losses) on investments
9
851,097
3,038,301
Profit before taxation
1,696,005
5,141,882
Tax on profit
10
(380,276)
(516,576)
Profit for the financial year
1,315,729
4,625,306
The profit and loss account has been prepared on the basis that all operations are continuing operations.
KIRLY GROUP HOLDINGS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
- 7 -
2021
2020
£
£
Profit for the year
1,315,729
4,625,306
Other comprehensive income
-
-
Total comprehensive income for the year
1,315,729
4,625,306
KIRLY GROUP HOLDINGS LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2021
31 December 2021
- 8 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
12
81,545
106,926
Investments
13
2
2
81,547
106,928
Current assets
Debtors falling due after more than one year
15
485,000
5,235,001
Debtors falling due within one year
15
41,583,175
33,351,919
Investments
16
7,342,647
7,522,586
Cash at bank and in hand
61,833
1,778,004
49,472,655
47,887,510
Creditors: amounts falling due within one year
17
(351,458)
(353,012)
Net current assets
49,121,197
47,534,498
Total assets less current liabilities
49,202,744
47,641,426
Provisions for liabilities
Provisions
18
210,000
210,000
Deferred tax liability
19
677,374
431,785
(887,374)
(641,785)
Net assets
48,315,370
46,999,641
Capital and reserves
Called up share capital
22
127
127
Share premium account
3,221,990
3,221,990
Capital redemption reserve
390,362
390,362
Other reserves
976,392
976,392
Profit and loss reserves
43,726,499
42,410,770
Total equity
48,315,370
46,999,641
The financial statements were approved by the board of directors and authorised for issue on 27 October 2022 and are signed on its behalf by:
M W Johnson
Director
Company Registration No. 03917262
KIRLY GROUP HOLDINGS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 9 -
Share capital
Share premium account
Capital redemption reserve
Other reserves
Profit and loss reserves
Total
£
£
£
£
£
£
Balance at 1 January 2020
127
3,221,990
390,361
976,393
37,785,464
42,374,335
Period ended 31 December 2020:
Profit and total comprehensive income for the period
-
-
-
-
4,625,306
4,625,306
Other movements
-
-
1
(1)
-
-
Balance at 31 December 2020
127
3,221,990
390,362
976,392
42,410,770
46,999,641
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
-
-
1,315,729
1,315,729
Balance at 31 December 2021
127
3,221,990
390,362
976,392
43,726,499
48,315,370
KIRLY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 10 -
1
Accounting policies
Company information
Kirly Group Holdings Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
11 Luard Road, Cambridge, CB2 8PJ.
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, modified to include the revaluation of certain financial instruments at fair value. The principal accounting policies adopted are set out below.
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
:
The
disclosure
requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b), 11.48(c), 12.26, 12.27, 12.29(a), 12.29(b), and 12.29A;
-
Section 26 ‘Share based Payment’
:
Share based payment arrangements required under FRS 102 paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
-
Section 33 ‘Related Party Disclosures’
:
Compensation for key management personnel
.
The financial statements of the company are consolidated in the financial statements of Kirly Limited. These consolidated financial statements are available from its registered office, 11 Luard Road, Cambridge, CB2 8PJ
.
1.2
Going concern
A
true
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 services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and equipment
10% Straight line
KIRLY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 11 -
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.5
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
.
1.6
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in
profit
or
loss
, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
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.
KIRLY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 12 -
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include
debtors
and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
rate
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in
profit
or
loss
, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
KIRLY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 13 -
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
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
rate
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
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.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
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.
KIRLY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 14 -
1.11
Provisions
Provisions are recognised when the
company
has a legal or constructive present obligation as a result of a past event, it is probable that the
company
will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.
Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision i
s
measured at present value
,
the unwinding of the discount is recognised as a finance cost in
profit
or
loss
in the period
in which
it arises.
1.12
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
For cash-settled share-based payments, a liability is recognised for the goods and services acquired, measured initially at the fair value of the liability. At the balance sheet date until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognised in profit or loss for the
year
.
1.14
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 lease
d
asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
KIRLY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 15 -
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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant
effect on amounts recognised in the financial statements.
Assessing indicators of impairment
In assessing whether there have been any indicators of impairment of assets, the directors consider both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability. There have been no indicators of impairments identified during the current financial year.
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 consideration
In 2019 Kirly Group Holdings Ltd disposed of its investment in NW Brown and Co Ltd. Under the terms of the Sale and Purchase Agreement (SPA) the company received initial consideration and additional consideration at a subsequent date. The additional consideration was agreed to be such sum as is equal to 0.75% of the Completion Assets Under Management (AUM) as derived from the AUM Report or the Revised Completion AUM but in any event capped at £10,000,000. The balance is subject to deductions as detailed within the SPA agreement prior to payment.
On the completion date of the sale the directors calculated estimated deferred consideration, based on available information and their knowledge of the industry, to be £4,812,800. This was included in the accounts for the period ended 31 December 2019, discounted to the present value using a rate of 1.75%.
The calculation is based on estimations of future events and is subject to a high degree of uncertainty. Six-monthly reports are provided to the directors from the purchasers detailing the potential deferred consideration and the directors have reviewed these against their original calculation and consider it to remain appropriate.
The deferred consideration should have been settled within two weeks of 30 September 2021, subject to the agreement of the AUM. However the consideration was disputed by the buyer. The
c
ase is currently in arbitration and a decision regarding
some of the matters in
dispute will be received on 11 November 2022
and by the end of the year the directors expect all outstanding issues to have been resolved.
KIRLY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 16 -
3
Turnover and other revenue
2021
2020
£
£
Other revenue
Interest income
426,513
476,283
Dividends received
471,365
1,455,932
Rental income
301,540
218,288
The company earns rental income on commercial property let or sublet to
third party
tenants.
4
Operating (loss)/profit
2021
2020
Operating (loss)/profit for the year is stated after charging:
£
£
Depreciation of owned tangible fixed assets
25,381
25,381
Operating lease charges
245,000
188,764
5
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
10,500
10,000
For other services
Taxation compliance services
500
400
Other taxation services
2,000
All other non-audit services
4,533
1,000
7,033
1,400
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Total
KIRLY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
6
Employees
(Continued)
- 17 -
Employment costs as detailed below are recharged from the parent entity:
2021
2020
£
£
Wages and salaries
2,432
Social security costs
1,887
Pension costs
40,000
44,319
7
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest receivable from group companies
417,959
456,844
Other interest income
8,554
19,439
Total interest revenue
426,513
476,283
Other income from investments
Dividends received
471,365
1,455,932
Total income
897,878
1,932,215
8
Interest payable and similar expenses
2021
2020
£
£
Other interest
256
4,382
9
Gains/(losses) on investments
2021
2020
£
£
Fair value gains/(losses) on financial instruments
Change in value of financial assets held at fair value through profit or loss
505,768
2,217,666
Other gains/(losses)
Gain on disposal of financial assets held at fair value through profit or loss
134,619
820,635
Amounts written back to financial assets held at cost
198,032
-
Other gains and losses
12,678
-
851,097
3,038,301
KIRLY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 18 -
10
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
134,687
124,342
Adjustments in respect of prior periods
(27,946)
Total current tax
134,687
96,396
Deferred tax
Origination and reversal of timing differences
83,019
420,180
Changes in tax rates
162,570
Total deferred tax
245,589
420,180
Total tax charge
380,276
516,576
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:
2021
2020
£
£
Profit before taxation
1,696,005
5,141,882
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
322,241
976,958
Tax effect of expenses that are not deductible in determining taxable profit
1,272
94
Tax effect of income not taxable in determining taxable profit
(127,185)
(276,626)
Group relief
(160,058)
Permanent capital allowances in excess of depreciation
4,274
4,154
Under/(over) provided in prior years
(27,946)
Deferred tax adjustments in respect of prior years
17,104
Effect of change in deferred tax rate
162,570
Taxation charge for the year
380,276
516,576
KIRLY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 19 -
12
Tangible fixed assets
Plant and equipment
£
Cost
At 1 January 2021 and 31 December 2021
516,009
Depreciation and impairment
At 1 January 2021
409,083
Depreciation charged in the year
25,381
At 31 December 2021
434,464
Carrying amount
At 31 December 2021
81,545
At 31 December 2020
106,926
13
Fixed asset investments
2021
2020
Notes
£
£
Investments in subsidiaries
14
2
2
Fixed asset investments revalued
The company uses the following hierarchy for determining and disclosing the fair value of financial investments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets
Level 2: prices based on recent transactions in identical assets
Level 3: prices determined using a valuation technique
None of the above investments
is
valued at amortised cost.
14
Subsidiaries
Details of the company's subsidiaries at 31 December 2021 are as follows:
Name of undertaking
Address
Nature of business
Class of
% Held
shares held
Direct
Kirly Property Services Limited
(A)
Commercial property letting
Ordinary
100.00
Kirly EB Ltd
(A)
Dormant
Ordinary
100.00
DAN Holdings Ltd
(A)
Dormant
Ordinary
100.00
Kirly FS Ltd
(A)
Dormant
Ordinary
100.00
Cambridge Index Ltd
(A)
Dormant
Ordinary
100.00
Registered office addresses (all UK unless otherwise indicated):
(A)
11 Luard Road, Cambridge, CB2 8PJ
KIRLY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 20 -
15
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
18,382
10,860
Amounts owed by group undertakings
36,200,152
32,278,293
Other debtors
5,265,231
956,397
Prepayments and accrued income
99,410
106,369
41,583,175
33,351,919
2021
2020
Amounts falling due after more than one year:
£
£
Amounts owed by group undertakings
485,000
585,000
Other debtors
4,650,001
485,000
5,235,001
Total debtors
42,068,175
38,586,920
16
Current asset investments
2021
2020
£
£
Listed investments
7,340,843
7,483,184
Unlisted investments
1,804
39,402
7,342,647
7,522,586
17
Creditors: amounts falling due within one year
2021
2020
Notes
£
£
Trade creditors
97,550
34,766
Amounts owed to group undertakings
114,667
48,553
Corporation tax
66,429
191,206
Deferred income
20
43,812
55,687
Accruals and deferred income
29,000
22,800
351,458
353,012
KIRLY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 21 -
18
Provisions for liabilities
2021
2020
£
£
Dilapidations
210,000
210,000
Movements on provisions:
Dilapidations
£
At 1 January 2021 and 31 December 2021
210,000
The provision relates to repairs required to be made under the terms of the lease to return the property, at the end of the lease, to the same state as when the lease commenced. The underlying lease was renewed in December 2013 (note 2
4
).
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2021
2020
Balances:
£
£
Accelerated capital allowances
17,104
-
Revaluations
660,270
431,785
677,374
431,785
2021
Movements in the year:
£
Liability at 1 January 2021
431,785
Charge to profit or loss
245,589
Liability at 31 December 2021
677,374
The net reversal of deferred tax liabilities expected to occur the year beginning after the reporting period is £Nil.
20
Deferred income
2021
2020
£
£
Other deferred income
43,812
55,687
KIRLY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 22 -
21
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
-
40,000
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.
22
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 0.009p each
1,410,339
1,410,339
127
127
23
Financial commitments, guarantees and contingent liabilities
The directors consider that contingent liabilities may arise due to the risk of service charges, and in particular rates, being absorbed by the company should vacant letting periods arise.
The property market has proved volatile in recent years and there have been unexpected changes in tenancies which have caused vacancies. It is impracticable to calculate the financial effect of the potential liabilities due to the uncertainties relating to timings and amounts.
The likelihood of being able to recover costs for any vacant letting periods is remote and the company would then be obliged to discharge certain liabilities prior to occupation of the premises by a new tenant.
Under the SPA described in Note 2 the buyer received various guarantees and warranties. General
cl
aim warranties were applicable within the period of two years of the
co
mpletion
d
ate
of
1 September 2019. The claim period ceased on 1 September 2021 and no claims have arisen.
Tax warranties claim period extends to seven years after the
c
ompletion
d
ate ceasing on 1 September 2026. At the year end there is no indication of any claim and the directors do not consider a claim to be probable or quantifiable for future periods. No provision has, therefore, been made within the accounts.
24
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2021
2020
£
£
Within one year
245,000
245,000
Between two and five years
1,000,000
995,000
In over five years
1,750,000
2,000,000
2,995,000
3,240,000
KIRLY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
24
Operating lease commitments
(Continued)
- 23 -
Lessor
The company's lease of its Cambridge premises at 16 Regent Street expires on 24 December 2033. The company has sublet, under operating leases to third parties, a part of the land and building leased above.
At the reporting end date the company had contracted with tenants for the following minimum lease payments:
2021
2020
£
£
Within one year
206,255
261,280
Between two and five years
718,770
862,570
In over five years
436,680
655,020
1,361,705
1,778,870
25
Related party transactions
The company has taken advantage of the exemption available in FRS 102 section 33.1A whereby it has not disclosed transactions with members of a wholly-owned group.
Transactions with related parties
During the year the company entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
2021
2020
Amounts due from related parties
£
£
Other related parties
665,071
634,883
The company has a subordinated loan with Freedom Insurance Services Limited, a company owned by Kirly Limited. The outstanding balance owed by Freedom Insurance Services Limited at the year-end was £585,000 (2020: £585,000)
in relation to the loan and £80,071 (2020: £49,882) in relation to interest
. The loan is repayable in 5 equal instalments commencing 1 August 2020. Interest is payable annually and is charged at LIBOR plus five percent. Interest of £30,040 was charged during the year to 31 December 2021 (2020: £22,035).
26
Ultimate controlling party
The company is a wholly owned subsidiary of Kirly Limited, a company registered in England and Wales. Its registered office is 11 Luard Road, Cambridge, CB2 8PJ. Mr and Mrs Johnson are the main shareholders of Kirly Limited.
The group in which the results of the company are consolidated is headed by Kirly Limited.
The smallest and largest group that the company is consolidated into is the group accounts for Kirly Limited. Accounts for this group can be found at the address disclosed above.
2021-12-31
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