Registered number: 04323631
K2 CONSULTANCY LIMITED
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE YEAR ENDED 31 DECEMBER 2020
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K2 CONSULTANCY LIMITED
CONTENTS
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Statement of Changes in Equity
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Notes to the Financial Statements
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K2 CONSULTANCY LIMITED
COMPANY INFORMATION
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Chartered Accountants & Statutory Auditors
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K2 CONSULTANCY LIMITED
REGISTERED NUMBER: 04323631
BALANCE SHEET
AS AT 31 DECEMBER 2020
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Capital redemption reserve
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K2 CONSULTANCY LIMITED
REGISTERED NUMBER: 04323631
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2020
The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
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D S Johnson
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The notes on pages 5 to 15 form part of these financial statements.
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K2 CONSULTANCY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
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Capital redemption reserve
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At 1 July 2019 (unaudited)
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Dividends: Equity capital
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Shares cancelled during the period
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At 1 January 2020 (Unaudited)
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The notes on pages 5 to 15 form part of these financial statements.
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K2 CONSULTANCY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
K2 Consultancy Limited is a private company limited by shares, domiciled in England and Wales.
The registered number is 04323631 and the address of its registered office and principal place of business is 4th Floor, 7 Holyrood Street, London, SE1 2EL.
The principal activity of the Company during the year was the development of building projects.
The financial statements are presented in Sterling, which is also the functional currency of the Company.
The financial statements are rounded to the nearest £.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The following principal accounting policies have been applied:
The financial statements have been prepared on a going concern basis. The Directors have considered relevant information, including the annual budget, forecast future cash flows and the impact of subsequent events in making their assessment. The COVID-19 pandemic and the ensuing economic shutdown has had a significant impact on the company’s operations.
Otak Inc, a fellow subsidiary, have provided the company with additional funding during the year. Both Otak Inc and HanmiGlobal Co.Ltd (the ultimate parent company) have confirmed that they will continue to support the company financially as required in future years and that they are in a position to do so. Furthermore they have confirmed that they will not demand repayment of the loans until the company has sufficient funds to repay the balance without detriment to the other creditors of the company.
In response to the COVID-19 pandemic, the Directors have performed a robust analysis of forecast future cash flows taking into account the potential impact on the business of possible future scenarios arising from the impact of COVID-19. This analysis also considers the effectiveness of available measures to assist in mitigating the impact.
Based on these assessments and having regard to the resources available to the entity, the Directors have concluded that there is no material uncertainty and that they can continue to adopt the going concern basis in preparing the annual report and accounts.
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K2 CONSULTANCY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.Accounting policies (continued)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, .
Depreciation is provided on the following basis:
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33% reducing balance per annum
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33% reducing balance per annum
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33% straight line per annum
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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K2 CONSULTANCY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.Accounting policies (continued)
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an 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.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
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K2 CONSULTANCY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.Accounting policies (continued)
Defined contribution pension plan
The Company operates a defined contribution plan for its 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 profit or loss 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.
Interest income is recognised in profit or loss using the effective interest method.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
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K2 CONSULTANCY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance Sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
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The average monthly number of employees, including directors, during the year was 17 (2019 - 20).
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K2 CONSULTANCY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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Charge for the year on owned assets
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At 31 December 2019 (unaudited)
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Prepayments and accrued income
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Cash and cash equivalents
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K2 CONSULTANCY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Creditors: Amounts falling due after more than one year
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K2 CONSULTANCY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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Analysis of the maturity of loans is given below:
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Amounts falling due within one year
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Amounts falling due 1-2 years
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Amounts falling due 2-5 years
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Amounts falling due after more than 5 years
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The bank loan as at 31 December 2020 relates to a Coronavirus Business Interruption Loan (CBILS) loan provided by the company's bankers. The loan is interest and capital repayment free for the first 6 months from drawdown and then attracts interest at a rate of 2.99% per annum. The loan is repayable in 66 equal installments of £1,439.
Other loans as at 31 December 2020 relate to a loan provided by Otak Inc. Interest is charged at 2.5% per annum on the loan. The loan is repayable in full in December 2022. As noted in accounting policy 2.2, Otak Inc have confirmed that they will not demand repayment of the loans until the company has sufficient funds to repay the balance without detriment to the other creditors of the company.
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K2 CONSULTANCY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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Charged to profit or loss
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The deferred tax asset is made up as follows:
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Accelerated capital allowances
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Tax losses carried forward
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Allotted, called up and fully paid
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75,000 (2019 - 75,000) Ordinary shares of £0.133333 each
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The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. Included in other creditors at the year end is £896 (2019 - £8,208) of unpaid pension contributions.
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K2 CONSULTANCY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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Commitments under operating leases
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At 31 December 2020 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Related party transactions
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At the Balance Sheet date an amount of £-nil (2019 - £588) was included in trade debtors and was due from Breithorn Developments Limited, a company with common Directors. No interest has been charged on the outstanding balance and there is no set date for repayment.
At the Balance Sheet date an amount of £9,419 (2019 - £6,111) was included in trade debtors and was due from Sergeants Mess Ltd, a company with common Directors. No interest has been charged on the outstanding balance and there is no set date for repayment.
On 16 December 2020 Otak Inc loaned the Company £300,000. Interest of 2.5% per annum is charged on the loan and it is repayable 24 months following drawdown. As at 31 December 2020 the Company owes Otak Inc £300,000.
In the previous year K2 Consultancy Group Limited transferred their trading assets and liabilities to K2 Consultancy Limited. K2 Consultancy Group Limited own 100% of the share capital in K2 Consultancy Limited. K2 Consultancy Limited paid a dividend totalling £121,724 to K2 Consultancy Group Limited.
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The ultimate parent company in the UK is Otak Group UK Limited, a company registered in England and Wales. Otak Group UK Limited and its subsidiaries are small and therefore consolidated financial statements are not prepared.
The ultimate parent company is HanmiGlobal Co.Ltd a company registered in South Korea. HanmiGlobal Co. Ltd are listed on the South Korean Stock Exchange. Consolidated financial statements are prepared and are available from Hanmi Global Co., Ltd, 9th Floor City Air Tower Bldg, 36 Taeheran-ro 87-gil, Gangnamgu, Seoul.
In the opinion of the Directors there is no ultimate controlling party.
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K2 CONSULTANCY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
The auditors' report on the financial statements for the year ended 31 December 2020 was unqualified.
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It includes an other matter paragraph stating that the financial statements for the period ended 31 December 2019 were unaudited.
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The audit report was signed on 30 September 2021 by Robert John Butler FCA (Senior Statutory Auditor) on behalf of MHA MacIntyre Hudson.
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