K Head Developments Limited - Period Ending 2022-08-31

K Head Developments Limited

Contents

Company Information	1
Balance Sheet	2
Notes to the Unaudited Financial Statements	3 to 10

K Head Developments Limited

Company Information

Directors

Mrs K Head Mr C Head

Registered office

Staverton Court Staverton Cheltenham Gloucestershire GL51 0UX

Accountants

Hazlewoods LLP Staverton Court Staverton Cheltenham Gloucestershire GL51 0UX

K Head Developments Limited

(Registration number: 07532568)
Balance Sheet as at 31 August 2022

	Note	2022 £	2021 £
Fixed assets
Tangible assets	4	23,127	21,037
Investments	5	27,000	27,000
		50,127	48,037
Current assets
Stocks		2,717,046	4,197,669
Debtors	6	479,640	374,767
Cash at bank and in hand		712,560	92,858
		3,909,246	4,665,294
Creditors: Amounts falling due within one year	7	(968,518)	(2,546,914)
Net current assets		2,940,728	2,118,380
Total assets less current liabilities		2,990,855	2,166,417
Creditors: Amounts falling due after more than one year	7	(163,408)	(181,708)
Net assets		2,827,447	1,984,709
Capital and reserves
Called up share capital		500,002	500,002
Profit and loss account		2,327,445	1,484,707
Shareholders' funds		2,827,447	1,984,709

For the financial year ending 31 August 2022 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

Directors' responsibilities:

•	The members have not required the company to obtain an audit of its accounts for the year in question in accordance with section 476; and
•	The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.

These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.

These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime and the option not to file the Profit and Loss Account has been taken.

Approved and authorised by the Board on 12 May 2023 and signed on its behalf by:
 

......................................... Mr C Head Director

K Head Developments Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 August 2022

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
Staverton Court
Staverton
Cheltenham
Gloucestershire
GL51 0UX

The principal place of business is:
The Coach House
Highnam Court
Highnam
Gloucestershire
GL51 0UX

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A smaller entities - 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' and the Companies Act 2006 (as applicable to companies subject to the small companies' regime).

Basis of preparation

These financial statements have been prepared using the historical cost convention except for, where disclosed in these accounting policies, certain items that are shown at fair value.

The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the company operates. Monetary amounts in these financial statements are rounded to the nearest Pound.

Going concern

After reviewing the company's forecasts and projections, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

Critical accounting 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 amounts 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
 

Judgements

No significant judgements have been made by management in preparing these financial statements.

K Head Developments Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 August 2022

Key sources of estimation uncertainty

No key sources of estimation uncertainty have been identified by management in preparing these financial statements other than those detailed in these accounting policies.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the company.

The company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the company's activities.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current corporation tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Deferred corporation tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the company. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets over their estimated useful lives, as follows:

Asset class	Depreciation method and rate
Motor Vehicles	20% reducing balance

Business combinations

Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquiisition date if the adjustment is probable and can be measured reliably.

Investments

Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

K Head Developments Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 August 2022

Trade debtors

Trade debtors are amounts due from customers for goods sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. All trade debtors are repayable within one year and hence are included at the undiscounted cost of cash expected to be received. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the debtors.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and all are repayable within one year and hence are included at the undiscounted amount of cash expected to be paid.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the profit and loss account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

K Head Developments Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 August 2022

Financial instruments

Classification
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability of the company is presented as a liability on the balance sheet. The corresponding dividends relating to the liability component are charged as interest expenses in the profit and loss account.

 Recognition and measurement
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

 Impairment
Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss as described below.

A non financial asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

The recoverable amount of goodwill is derived from measurement of the present value of the future cash flows of the cash-generating units ('CGUs') of which the goodwill is a part. Any impairment loss in respect of a CGU is allocated first to the goodwill attached to that CGU, and then to other assets within that CGU on a pro-rata basis.

Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised. Where a reversal of impairment occurs in respect of a CGU, the reversal is applied first to the assets (other than goodwill) of the CGU on a pro-rata basis and then to any goodwill allocated to that CGU.

For financial assets carried at amortised cost, the amount of an impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.

Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

3

Staff numbers

The average number of persons employed by the company (including directors) during the year, was 2 (2021 - 2).

K Head Developments Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 August 2022

4

Tangible assets

	Motor vehicles  £
Cost
At 1 September 2021	55,901
Additions	25,430
Disposals	(47,901)
At 31 August 2022	33,430
Depreciation
At 1 September 2021	34,864
Charge for the year	6,156
Eliminated on disposal	(30,717)
At 31 August 2022	10,303
Carrying amount
At 31 August 2022	23,127
At 31 August 2021	21,037

K Head Developments Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 August 2022

5

Investments

	2022 £	2021 £
Investments in associates	27,000	27,000

Associates	£
Cost
At 1 September 2021	27,000
At 31 August 2022	27,000
Carrying amount
At 31 August 2022	27,000
At 31 August 2021	27,000

Details of undertakings

Details of the investments (including principal place of business of unincorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking	Registered office	Holding	Proportion of voting rights and shares held
			2022	2021
Associates
VRxperience Limited	England & Wales	Ordinary	50%	50%

6

Debtors

	2022  £	2021  £
Trade debtors	12,972	106,000
Other debtors	432,182	236,103
Prepayments	-	1,434
Deferred tax assets	34,486	31,230
	479,640	374,767

K Head Developments Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 August 2022

7

Creditors

	Note	2022  £	2021  £
Due within one year
Loans and borrowings	8	10,000	1,539,945
Trade creditors		25,864	37,792
Other creditors		487,999	567,488
Accrued expenses		244,440	243,991
Corporation tax liability		200,215	157,698
		968,518	2,546,914
Due after one year
Loans and borrowings	8	163,408	181,708

8

Loans and borrowings

	2022 £	2021 £
Current loans and borrowings
Bank borrowings	-	1,296,500
HP and finance lease liabilities	-	406
Other borrowings	10,000	243,039
	10,000	1,539,945

	2022 £	2021 £
Non-current loans and borrowings
Other borrowings	163,408	181,708

Finance lease liabilities
Finance lease liabilities are secured against the asset in which they relate to.

9

Share capital

Allotted, called up and fully paid shares

	2022		2021
	No.	£	No.	£
Ordinary A share of £1 each	1	1	1	1
Ordinary B share of £1 each	1	1	1	1
Redeemable preference shares of £1 each	500,000	500,000	500,000	500,000
	500,002	500,002	500,002	500,002

Share rights
The Ordinary A and Ordinary B shares carry separate rights to dividends but in all other aspects rank pari passu.

The redeemable preference shares carry no voting rights or rights to dividends and are redeemable at the option of the company for par.

K Head Developments Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 August 2022

10

Related party transactions

Other related party transactions

During the year the company made the following related party transactions:

Company directors
Included in other borrowings is a loan to/(from) directors of the company. At the balance sheet date the amount due from/(to) the directors was £72,162 (2021 - (£233,039)).

Mr T Head
(Close relative of Mrs K Head)
Included in other debtors/(other borrowings) is an interest free loan to/(from) Mr T Head. At the balance sheet date the amount due from/(to) Mr T Head was £125,000 (2021 - (£144,208)).

Highnam Construction Limited
(A company under common control)
Included in other creditors is an interest free loan from Highnam Construction Limited. At the balance sheet date the amount due to Highnam Construction Limited was £487,999 (2021 - £567,488).

11

Deferred tax

Deferred tax assets and liabilities

2022	Asset £
Difference between accumulated depreciation and amortisation and capital allowances	(2,004)
Short term timing differences	36,490
	34,486

2021	Asset £
Difference between accumulated depreciation and amortisation and capital allowances	(5,259)
Short term timing differences	36,489
	31,230