Kilmona Group Limited Group accounts (Group and Company)

KILMONA GROUP LIMITED - Company Information

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COMPANY REGISTRATION NUMBER: NI641628

Kilmona Group Limited

Financial Statements

30 June 2019

Kilmona Group Limited

Financial Statements

Year ended 30 June 2019

Contents	Page

Officers and professional advisers	1

Strategic report	2

Directors' report	4

Independent auditor's report to the member	6

Consolidated statement of comprehensive income	9

Consolidated statement of financial position	10

Company statement of financial position	11

Consolidated statement of changes in equity	12

Company statement of changes in equity	13

Consolidated statement of cash flows	14

Notes to the financial statements	15

Kilmona Group Limited

Officers and Professional Advisers

The board of directors	P Kearney
	B Kearney

Registered office	8th Floor Bedford House
	Bedford Street
	Belfast
	BT2 7FD

Auditor	Maneely Mc Cann
	Chartered accountant & statutory auditor
	Aisling House
	50 Stranmillis Embankment
	Belfast
	BT9 5FL

Bankers	Bank of Ireland
	4 - 8 High Street
	Belfast
	BT1 2BA

	Fairfield REF ECS Designated Activity Company
	Ground Floor
	27 Merrion Square
	Dublin 2
	Ireland

	Ulster Bank Limited
	11-16 Donegall Square East
	Belfast
	BT1 5UB

	Danske Bank
	Benmore House
	353 Lisburn Road
	Belfast
	BT9 7EP

Solicitors	Tughan's
	Marlborough House
	30 Victoria Street
	Belfast
	BT1 3GG

	Dickson Minto W.S
	16 Charlotte Square
	Edinburgh
	EH2 4DF

Keystone Law

Rochester Building

28 Adelaide Street

Belfast BT2 8GD

O'Reilly Stewart

75-77 May Street

Belfast

BT1 3JL

Kilmona Group Limited

Strategic Report

Year ended 30 June 2019

Principal activities and business review

The principal activities of the Kilmona Group during the year were those of a holding company, the provision of management services to subsidiaries, hotelier, warehouse storage and handling and the development, sale and rental of property . Since 9 October 2017, Fairfield Real Estate Finance (FREF) and Ulster Bank (UB) have provided secured lending facilities to the Kilmona Group based on the Group's asset strategies which will develop and maximise the inherent medium to long term economic value of these assets. The Kilmona Group has the necessary cash cover and secured lender support to meet its total on-going unsecured creditor obligations and liabilities for the medium to long term. In light of the above, the Directors consider it appropriate to prepare the financial statements on a going concern basis.

Future developments

The Directors intend to develop and maximise the inherent medium to long term economic value of the Kilmona Group's asset base and acquire additional assets at value for development.

The company's operations expose it to a variety of financial risks that include the effects of changes in debt, market prices, credit risk, liquidity risk and interest rate risk. The company and the group have in place a risk management programme that seeks to limit the adverse effects on the financial performance of the company by monitoring levels of debt finance and related finance costs. Given the size of the company, the directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the board. The policies set out by the board are implemented by the directors. Given the nature and location of its operations the company and the group are not significantly exposed to price risk or foreign exchange risk. Liquidity risk The group actively maintains a mixture of long term and short term debt finance that is designed to ensure the company has sufficient available funds for operations and planned expansions. Interest rate risk The group has both interest bearing assets and interest bearing liabilities. Interest bearing assets include cash balances, all of which earn interest at a variable rate. The group has a policy of maintaining interest bearing liabilities at fixed rates via interest rate swaps with its current lenders. Credit risk It is standard group policy to perform appropriate credit checks on all potential customers before contracts are entered into. The nature of contract normally undertaken means there is no undue amount of exposure to any individual customer.

This report was approved by the board of directors on 23 December 2019 and signed on behalf of the board by:

P Kearney

Director

Registered office:

8th Floor Bedford House

Bedford Street

Belfast

BT2 7FD

Kilmona Group Limited

Directors' Report

Year ended 30 June 2019

The directors present their report and the financial statements of the group for the year ended 30 June 2019 .

Directors

The directors who served the company during the year were as follows:

P Kearney
B Kearney

Dividends

The directors do not recommend the payment of a dividend.

Employment of disabled persons

The group gives full and fair consideration to applications for employment made by disabled persons where the requirements of the job can be adequately fulfilled. Where existing employees become disabled, it is the group's policy, wherever practicable, to provide continuing employment under normal terms and conditions, and to provide training, career development and promotion wherever possible.

Employee involvement

The group provides employees with information on matters of concern to them through normal management channels. The involvement of the employee in the group's performance is encouraged through appropriate incentive arrangements.

Directors' responsibilities statement

The directors are responsible for preparing the strategic report, directors' 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 group and the company and the profit or loss of the group for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgments and accounting estimates that are reasonable and prudent; - 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. Auditor

Each of the persons who is a director at the date of approval of this report confirms that:

- so far as they are aware, there is no relevant audit information of which the group and the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the group and the company's auditor is aware of that information.

This report was approved by the board of directors on 23 December 2019 and signed on behalf of the board by:

P Kearney

Director

Registered office:

8th Floor Bedford House

Bedford Street

Belfast

BT2 7FD

Kilmona Group Limited

Independent Auditor's Report to the Member of Kilmona Group Limited

Year ended 30 June 2019

Opinion

We have audited the financial statements of Kilmona Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 June 2019 which comprise the consolidated statement of comprehensive income, consolidated statement of financial position, company statement of financial position, consolidated statement of changes in equity, company statement of changes in equity, consolidated statement of cash flows and the related notes, 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). This report is made solely to the company's member, 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 member 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 member as a body, for our audit work, for this report, or for the opinions we have formed. In our opinion the financial statements: - give a true and fair view of the state of the group's and of the parent company's affairs as at 30 June 2019 and of the group's loss for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 group's or the parent 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.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. 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 the audit:

- the information given in the strategic report and the directors' report 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.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or - the parent company 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' responsibilities statement, 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 group's and the parent 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 group or the parent 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. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group's internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's or the parent company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. - Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Cathal Maneely

(Senior Statutory Auditor)

For and on behalf of

Maneely Mc Cann

Chartered accountant & statutory auditor

Aisling House

50 Stranmillis Embankment

Belfast

BT9 5FL

23 December 2019

Kilmona Group Limited

Consolidated Statement of Comprehensive Income

Year ended 30 June 2019

		2019	2018
Note		£	£
Turnover	4	23,817,277	29,695,454

Cost of sales	13,256,092	18,291,283
	-------------	-------------
Gross profit	10,561,185	11,404,171

Administrative expenses		9,920,253	( 2,919,902)
Other operating income	5	133,679	136,677
		-------------	-------------
Operating profit	6	774,611	14,460,750

Other interest receivable and similar income	10	207	–
Interest payable and similar expenses	11	5,744,510	7,610,298
		-------------	-------------
(Loss)/profit before taxation		( 4,969,692)	6,850,452

Tax on (loss)/profit	12	( 284,977)	253,971
		------------	------------
(Loss)/profit for the financial year and total comprehensive income		( 4,684,715)	6,596,481
		------------	------------

All the activities of the group are from continuing operations.

Kilmona Group Limited

Consolidated Statement of Financial Position

30 June 2019

	2019	2018
Note	£	£

Fixed assets

Intangible assets	13	3,742,833	4,248,152
Tangible assets	14	136,074,028	131,464,915
		--------------	--------------
		139,816,861	135,713,067

Current assets

Stocks	16	12,800,601	9,275,447
Debtors	17	4,121,244	4,628,723
Cash at bank and in hand		4,545,101	5,855,619
		-------------	-------------
		21,466,946	19,759,789

Creditors: amounts falling due within one year	18	29,576,232	27,707,676
		-------------	-------------
Net current liabilities		8,109,286	7,947,887
		--------------	--------------
Total assets less current liabilities		131,707,575	127,765,180

Creditors: amounts falling due after more than one year	19	108,837,543	99,925,456

Provisions	21	–	284,977
		--------------	--------------
Net assets		22,870,032	27,554,747
		--------------	--------------

Capital and reserves

Called up share capital	26	300	300
Other reserves, including the fair value reserve	27	8,622,782	8,622,782
Profit and loss account	27	14,246,950	18,931,665
		-------------	-------------
Shareholder funds		22,870,032	27,554,747
		-------------	-------------

These financial statements were approved by the board of directors and authorised for issue on 23 December 2019 , and are signed on behalf of the board by:

P Kearney

Director

Company registration number: NI641628

Kilmona Group Limited

Company Statement of Financial Position

30 June 2019

	2019	2018
Note	£	£

Fixed assets

Investments	15	251	251

Current assets

Debtors	17	300	300
Cash at bank and in hand		200,197	–
		---------	----
		200,497	300

Creditors: amounts falling due within one year	18	251	251
		---------	----
Net current assets		200,246	49
		---------	----
Total assets less current liabilities		200,497	300

Creditors: amounts falling due after more than one year	19	200,000	–
		---------	----
Net assets		497	300
		---------	----

Capital and reserves

Called up share capital	26	300	300
Profit and loss account	27	197	–
		----	----
Shareholder funds		497	300
		----	----

The profit for the financial year of the parent company was £ 197 (2018: £Nil).

These financial statements were approved by the board of directors and authorised for issue on 23 December 2019 , and are signed on behalf of the board by:

P Kearney

Director

Company registration number: NI641628

Kilmona Group Limited

Consolidated Statement of Changes in Equity

Year ended 30 June 2019

	Called up share capital	Other reserves, including the fair value reserve	Profit and loss account	Total
	£	£	£	£
At 1 July 2017	150	8,622,782	12,335,184	20,958,116

Profit for the year			6,596,481	6,596,481
	----	------------	-------------	-------------
Total comprehensive income for the year	–	–	6,596,481	6,596,481

Issue of shares	150	–	–	150
	----	------------	-------------	-------------
Total investments by and distributions to owners	150	–	–	150

At 30 June 2018	300	8,622,782	18,931,665	27,554,747

Loss for the year			( 4,684,715)	( 4,684,715)
	----	------------	-------------	-------------
Total comprehensive income for the year	–	–	( 4,684,715)	( 4,684,715)

	----	------------	-------------	-------------
At 30 June 2019	300	8,622,782	14,246,950	22,870,032
	----	------------	-------------	-------------

Kilmona Group Limited

Company Statement of Changes in Equity

Year ended 30 June 2019

	Called up share capital	Profit and loss account	Total
	£	£	£
At 1 July 2017	150	–	150

Profit for the year		–	–

Issue of shares	150	–	150
	----	----	----
Total investments by and distributions to owners	150	–	150

At 30 June 2018	300	–	300

Profit for the year		197	197
	----	----	----
Total comprehensive income for the year	–	197	197

	----	----	----
At 30 June 2019	300	197	497
	----	----	----

Kilmona Group Limited

Consolidated Statement of Cash Flows

Year ended 30 June 2019

	2019	2018
	£	£

Cash flows from operating activities

(Loss)/profit for the financial year	( 4,684,715)	6,596,481

Adjustments for:
Depreciation of tangible assets	1,807,746	1,140,612
Amortisation of intangible assets	505,319	347,236
Fair value adjustment of investment property	816,689	( 11,341,979)
Other interest receivable and similar income	( 207)	–
Interest payable and similar expenses	5,744,510	7,610,298
Gains on disposal of tangible assets	( 75,052)	–
Tax on profit	( 284,977)	253,971
Accrued (income)/expenses	( 1,112,110)	1,928,121

Changes in:
Stocks	( 3,525,154)	915,013
Trade and other debtors	507,480	( 2,453,340)
Trade and other creditors	( 302,748)	5,694,561
	------------	-------------
Cash generated from operations	( 603,219)	10,690,974

Interest paid	( 5,744,510)	( 7,610,298)
Interest received	207	–
	------------	-------------
Net cash (used in)/from operating activities	( 6,347,522)	3,080,676
	------------	-------------

Cash flows from investing activities

Purchase of tangible assets	( 7,961,554)	( 31,579,344)
Proceeds from sale of tangible assets	803,057	2,000,000
Purchase of intangible assets	–	( 4,595,388)
	------------	-------------
Net cash used in investing activities	( 7,158,497)	( 34,174,732)
	------------	-------------

Cash flows from financing activities

Proceeds from issue of ordinary shares	–	150
Proceeds from borrowings	9,723,088	20,729,765
Proceeds from loans from participating interests	2,425,944	8,625,299
Payments of finance lease liabilities	46,469	125,753
	-------------	-------------
Net cash from financing activities	12,195,501	29,480,967
	-------------	-------------

Net decrease in cash and cash equivalents	( 1,310,518)	( 1,613,089)
Cash and cash equivalents at beginning of year	5,855,619	7,468,708
	------------	------------
Cash and cash equivalents at end of year	4,545,101	5,855,619
	------------	------------

Kilmona Group Limited

Notes to the Financial Statements

Year ended 30 June 2019

1. General information

The company is a private company limited by shares, registered in Northern Ireland. The address of the registered office is 8th Floor Bedford House, Bedford Street, Belfast, BT2 7FD.

2. Statement of compliance

These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.

3. Accounting policies

Basis of preparation

The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.

The financial statements are prepared in sterling, which is the functional currency of the entity.

Going concern

The financial statements have been prepared on the going concern basis, despite a group company having a net balance sheet deficit at the year end. Since 9 October 2017, Fairfield Real Estate Finance (FREF) and Ulster Bank (UB) have provided secured lending facilities to the Kilmona Group based on the Group's asset strategies which will develop and maximise the inherent medium to long term economic value of these assets. The Kilmona Group has the necessary cash cover and secured lender support to meet its total on-going unsecured creditor obligations and liabilities for the medium to long term. In light of the above, the Directors consider it appropriate to prepare the financial statements on a going concern basis.

Disclosure exemptions

The parent company satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following reduced disclosures available under FRS 102:

(a) Disclosures in respect of each class of share capital have not been presented.

(b) No cash flow statement has been presented for the company.

(d) No disclosure has been given for the aggregate remuneration of key management personnel.

Consolidation

The financial statements consolidate the financial statements of the Kilmona Group Limited and all of its subsidiary undertakings. The results of subsidiaries acquired or disposed of during the year are included from or to the date that control passes. A group reconstruction completed on 9 October 2017, whereby Kilmona Group Limited became the ultimate parent company of the group by way of a share for share exchange with Kilmona Investments Limited. This has been accounted for using the merger accounting method as permitted under FRS 102 for group reconstructions, and the comparative information in the financial statements has been restated accordingly as though the group has always existed in its current form. Three new subsidiaries were acquired during the year and these have been accounted for using the acquisition method. The parent company has applied the exemption contained in section 408 of the Companies Act 2006 and has not included its individual statement of comprehensive income.

Judgements and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Revenue recognition

Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods supplied and services rendered, stated net of discounts and of Value Added Tax. It represents the amount derived from proceeds of sale of trading properties, rentals and service charges receivable on lettings to tenants. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer, usually on despatch of the goods, the amount of revenue can be measured reliably, it is probable that the associated economic benefits will flow to the entity, and the costs incurred or to be incurred in respect of the transactions can be measured reliably. Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that expenses recognised are recoverable.

Exceptional items

Exceptional items are disclosed separately in the financial statements in order to provide further understanding of the financial performance of the entity. They are material items of income or expense that have been shown separately because of their nature or amount.

Income tax

The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date. Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference. Tax losses are surrendered between group companies for no consideration.

Operating leases

Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.

Goodwill

Goodwill arises on business acquisitions and represents the excess of the cost of the acquisition over the company's interest in the net amount of the identifiable assets, liabilities and contingent liabilities of the acquired business. Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. It is amortised on a straight-line basis over its useful life. Where a reliable estimate of the useful life of goodwill or intangible assets cannot be made, the life is presumed not to exceed ten years.

Intangible assets

Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses. Any intangible assets carried at revalued amounts, are recorded at the fair value at the date of revaluation, as determined by reference to an active market, less any subsequent accumulated amortisation and subsequent accumulated impairment losses. Intangible assets acquired as part of a business combination are recorded at the fair value at the acquisition date.

Amortisation

Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:

	Goodwill	-	20% straight line

If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.

Tangible assets

Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss. Investment property Investment property is initially recorded at cost, which includes purchase price and any directly attributable expenditure. Investment property is revalued to its fair value at each reporting date and any changes in fair value are recognised in profit or loss. If a reliable measure of fair value is no longer available without undue cost or effort for an item of investment property, it shall be transferred to tangible assets and treated as such until it is expected that fair value will be reliably measurable on an on-going basis.

Depreciation

Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:

Land & buildings	-	2% straight line
Plant and machinery	-	Between 10% Straight Line and 25% Reducing Balance
Fixtures and fittings	-	Between 15% Reducing Balance and 33.3% Straight Line
Motor vehicles	-	Between 15% Straight Line and 25% Straight Line

Investments

Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.

Listed investments are measured at fair value with changes in fair value being recognised in profit or loss.

Investments in associates

Investments in associates are accounted for using the equity method of accounting, whereby the investment is initially recognised at the transaction price and subsequently adjusted to reflect the group's share of the profit or loss, other comprehensive income and equity of the associate.

Investments in joint ventures

Investments in joint ventures are accounted for using the equity method of accounting, whereby the investment is initially recognised at the transaction price and subsequently adjusted to reflect the group's share of the profit or loss, other comprehensive income and equity of the joint venture.

Impairment of fixed assets

A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.

Stocks

Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition. Work in progress Work in progress is valued on the basis of direct costs plus attributable overheads based on normal level of activity. Provision is made for any foreseeable losses where appropriate. No element of profit is included in the valuation of work in progress.

Finance leases and hire purchase contracts

Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.

Provisions

Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.

Financial instruments

A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Debt instruments are subsequently measured at amortised cost. Where investments in non-convertible preference shares and non-puttable ordinary shares or preference shares are publicly traded or their fair value can otherwise be measured reliably, the investment is subsequently measured at fair value with changes in fair value recognised in profit or loss. All other such investments are subsequently measured at cost less impairment. Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Other financial instruments are subsequently measured at fair value, with any changes recognised in profit or loss, with the exception of hedging instruments in a designated hedging relationship.

Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.

Defined contribution plans

Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

4. Turnover

Turnover arises from:

	2019	2018
	£	£
Property sales	3,754,650	11,703,850
Rent receivable	6,496,379	8,243,657
Hotel income	11,644,361	7,832,815
Warehousing & storage handling	1,921,887	1,915,132
	-------------	-------------
	23,817,277	29,695,454
	-------------	-------------

The whole of the turnover is attributable to the principal activity of the group wholly undertaken in the United Kingdom.

5. Other operating income

	2019	2018
	£	£
Other operating income	133,679	136,677
	---------	---------

6. Operating profit

Operating profit or loss is stated after charging/crediting:

	2019	2018
	£	£
Amortisation of intangible assets	505,319	347,236
Depreciation of tangible assets	1,807,746	1,140,612
Gains on disposal of tangible assets	( 75,052)	–
Fair value adjustments to investment property	816,689	( 11,341,979)
Impairment of trade debtors	69,448	(134,161)
Operating lease rentals	4,685	–
	------------	-------------

7. Auditor's remuneration

	2019	2018
	£	£
Fees payable for the audit of the financial statements	56,000	55,000
	--------	--------

8. Staff costs

The average number of persons employed by the group during the year, including the directors, amounted to:

	2019	2018
	No.	No.
Number of other staff	299	301
	----	----

The aggregate payroll costs incurred during the year, relating to the above, were:

	2019	2018
	£	£
Wages and salaries	3,945,549	2,526,662
Social security costs	222,512	107,665
Other pension costs	47,702	19,926
	------------	------------
	4,215,763	2,654,253
	------------	------------

9. Exceptional items

	Group		Company
	2019	2018	2019	2018
	£	£	£	£
Fair value adjustment in respect of investment properties	816,689	11,341,979	–	–
	---------	-------------	----	----

Included within administrative expenses in the current year is the revaluation of investment properties to their fair value at the year end, resulting in a debit to the income statement of £816,689 (2018: credit of £11,341,979).

10. Other interest receivable and similar income

	2019	2018
	£	£
Interest on cash and cash equivalents	207	–
	----	----

11. Interest payable and similar expenses

	2019	2018
	£	£
Interest on banks loans and overdrafts	5,707,009	7,573,082
Interest on obligations under finance leases and hire purchase contracts	8,679	7,640
Other interest payable and similar charges	28,822	29,576
	------------	------------
	5,744,510	7,610,298
	------------	------------

12. Tax on profit

Major components of tax income

	2019	2018
	£	£

Deferred tax:

Origination and reversal of timing differences	( 284,977)	253,971
	---------	---------
Tax on profit	( 284,977)	253,971
	---------	---------

Reconciliation of tax (income)/expense

The tax assessed on the (loss)/profit on ordinary activities for the year is higher than (2018: lower than) the standard rate of corporation tax in the UK of 19 % (2018: 19 %).

	2019	2018
	£	£
(Loss)/profit on ordinary activities before taxation	( 4,969,692)	6,850,452
	------------	------------
(Loss)/profit on ordinary activities by rate of tax	( 944,242)	1,301,586
Effect of expenses not deductible for tax purposes	231,877	( 1,794,349)
Effect of capital allowances and depreciation	111,285	60,186
Utilisation of tax losses	( 114,419)	( 437,695)
Unused tax losses	715,499	870,272
Movement in deferred tax	( 284,977)	253,971
	------------	------------
Tax on profit	( 284,977)	253,971
	------------	------------

Factors that may affect future tax income

At 30 June 2019, the group had a potential deferred tax asset of £4.6m (2018: £6.2m) which has not been recognised in the financial statements as its future recovery is uncertain.

13. Intangible assets

Group	Goodwill	Licences	Total
	£	£	£
Cost
At 1 July 2018 and 30 June 2019	7,607,045	200,000	7,807,045
	------------	---------	------------
Amortisation
At 1 July 2018	3,558,893	–	3,558,893
Charge for the year	505,319	–	505,319
	------------	---------	------------
At 30 June 2019	4,064,212	–	4,064,212
	------------	---------	------------
Carrying amount
At 30 June 2019	3,542,833	200,000	3,742,833
	------------	---------	------------
At 30 June 2018	4,048,152	200,000	4,248,152
	------------	---------	------------

The company has no intangible assets.

14. Tangible assets

Group	Land & buildings	Investment properties	Plant and machinery	Fixtures and fittings	Motor vehicles	Total
	£	£	£	£	£	£
Cost
At 1 Jul 2018	19,274,831	104,047,988	347,454	8,992,589	302,412	132,965,274
Additions	1,107,380	4,053,810	–	2,317,414	482,950	7,961,554
Disposals	–	( 400,000)	–	–	( 388,999)	( 788,999)
Revaluations	–	( 823,070)	–	–	–	( 823,070)
Transfers	( 892,895)	892,894	–	–	–	( 1)
	-------------	--------------	---------	-------------	---------	--------------
At 30 Jun 2019	19,489,316	107,771,622	347,454	11,310,003	396,363	139,314,758
	-------------	--------------	---------	-------------	---------	--------------
Depreciation
At 1 Jul 2018	288,317	–	332,547	741,989	137,506	1,500,359
Charge for the year	422,023	–	3,621	1,338,061	44,041	1,807,746
Disposals	–	–	–	–	( 60,994)	( 60,994)
Transfers	( 6,381)	–	–	–	–	( 6,381)
	-------------	--------------	---------	-------------	---------	--------------
At 30 Jun 2019	703,959	–	336,168	2,080,050	120,553	3,240,730
	-------------	--------------	---------	-------------	---------	--------------
Carrying amount
At 30 Jun 2019	18,785,357	107,771,622	11,286	9,229,953	275,810	136,074,028
	-------------	--------------	---------	-------------	---------	--------------
At 30 Jun 2018	18,986,514	104,047,988	14,907	8,250,600	164,906	131,464,915
	-------------	--------------	---------	-------------	---------	--------------

The company has no tangible assets.

Tangible assets held at valuation

The investment properties were professionally revalued in September 2017 and September 2018 by CBRE, and in September 2017 by Lambert Smith Hampton, Property Consultants. A property held by a group company was revalued in September 2018 by McConnell Chartered Surveyors. All properties were revalued on the basis of an 'Open Market Valuation' methodology pursuant to the principles of the 'Red Book' valuations as stipulated by the Royal Institute of Chartered Surveyors. If investment properties had not been revalued they would have been included in the financial statements at 30 June 2019 at an historic cost of £133,513,204 (2018: £120,086,049).

Finance leases and hire purchase contracts

Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:

Group	Land & buildings	Motor vehicles	Total
	£	£	£
At 30 June 2019	155,718	275,811	431,529
	---------	---------	---------
At 30 June 2018	318,132	329,814	647,946
	---------	---------	---------

15. Investments

The group has no investments.

Company	Shares in group undertakings
	£
Cost
At 1 July 2018 and 30 June 2019	251
	----
Impairment
At 1 July 2018 and 30 June 2019	–
	----

Carrying amount
At 1 July 2018 and 30 June 2019	251
	----
At 30 June 2018	251
	----

Subsidiaries, associates and other investments

Details of the investments in which the parent company has an interest of 20% or more are as follows:

	Class of share	Percentage of shares held
Subsidiary undertakings
Kilmona Investments Limited	Ordinary	100
Loughview Leisure Holdings Limited	Ordinary	100
Lanyon Homes NI Limited	Ordinary	100

Kilmona Holdings Limited, a holding company incorporated in Northern Ireland, is a wholly owned subsidiary of Kilmona Investments Limited. Kilmona Property Limited, a company incorporated in Northern Ireland and involved in the rental of property, is a wholly owned subsidiary of Kilmona Holdings Limited. Annanpat Limited, a dormant company incorporated in Northern Ireland, is a wholly owned subsidiary of Kilmona Property Limited. Ballyhampton Limited, a company incorporated in Northern Ireland and involved in the rental of property, is a wholly owned subsidiary of Kilmona Property Limited. CDC (NI) Ltd, a company incorporated in Northern Ireland and involved in warehouse and storage handling, is a wholly owned subsidiary of Kilmona Property Limited. Beacons Place Limited, a dormant company incorporated in Scotland, is a wholly owned subsidiary of Kilmona Property Limited. Lanyon Central LLP, is a dormant LLP incorporated in Northern Ireland, 50% of which is owned by Kilmona Property Limited. Kilmona Private Equity Limited, a holding company incorporated in Northern Ireland, is a wholly owned subsidiary of Kilmona Holdings Limited. Lanyon Place Limited, a company incorporated in Northern Ireland and involved in the rental of property, is a wholly owned subsidiary of Kilmona Private Equity Limited. Loughview Leisure Group Limited, a company incorporated in Northern Ireland and involved in the hotel trade, is a wholly owned subsidiary of Loughview Leisure Holdings Limited. Kilmona Fairdown Limited, a dormant company incorporated in Northern Ireland, is a wholly owned subsidiary of Lanyon Homes NI Limited.

16. Stocks

	Group		Company
	2019	2018	2019	2018
	£	£	£	£
Development land	1,549,592	1,560,952	–	–
Work in progress	11,157,708	7,628,623	–	–
Finished goods and goods for resale	93,301	85,872	–	–
	-------------	------------	----	----
	12,800,601	9,275,447	–	–
	-------------	------------	----	----

17. Debtors

	Group		Company
	2019	2018	2019	2018
	£	£	£	£
Trade debtors	678,324	1,223,801	–	–
Amounts owed by related parties	620,056	853,135	–	–
Prepayments and accrued income	1,749,034	1,860,722	–	–
Other debtors	1,073,830	691,065	300	300
	------------	------------	----	----
	4,121,244	4,628,723	300	300
	------------	------------	----	----

The debtors above include the following amounts falling due after more than one year:

	Group		Company
	2019	2018	2019	2018
	£	£	£	£
Amounts owed by related parties	620,056	76,146	–	–
Prepayments and accrued income	525,595	816,468	–	–
	------------	---------	----	----
	1,145,651	892,614	–	–
	------------	---------	----	----

18. Creditors: amounts falling due within one year

	Group		Company
	2019	2018	2019	2018
	£	£	£	£
Bank loans and overdrafts	2,370,000	1,614,000	–	–
Trade creditors	5,767,111	4,498,485	–	–
Amounts owed to related parties	6,480,627	4,054,683	–	–
Accruals and deferred income	5,815,193	6,927,303	–	–
Corporation tax	5	5	–	–
Social security and other taxes	573,808	460,381	–	–
Obligations under finance leases and hire purchase contracts	54,002	78,219	–	–
Director loan accounts	1,785,038	1,659,351	–	–
Other creditors	6,730,448	8,415,249	251	251
	-------------	-------------	----	----
	29,576,232	27,707,676	251	251
	-------------	-------------	----	----

19. Creditors: amounts falling due after more than one year

	Group		Company
	2019	2018	2019	2018
	£	£	£	£
Bank loans and overdrafts	103,693,822	94,852,421	–	–
Amounts owed to group undertakings	–	–	200,000	–
Amounts owed to related parties	5,025,400	5,025,400	–	–
Obligations under finance leases and hire purchase contracts	118,220	47,534	–	–
Other creditors	101	101	–	–
	--------------	-------------	---------	----
	108,837,543	99,925,456	200,000	–
	--------------	-------------	---------	----

The group's main bank loans are secured by fixed and floating charges over the assets and undertakings on the group and intercompany guarantees.

A group company's loan is secured by a freehold legal charge over the company's assets and an all monies debenture over the company.

20. Finance leases and hire purchase contracts

The total future minimum lease payments under finance leases and hire purchase contracts are as follows:

	Group		Company
	2019	2018	2019	2018
	£	£	£	£
Not later than 1 year	54,002	78,219	–	–
Later than 1 year and not later than 5 years	118,220	47,534	–	–
	---------	---------	----	----
	172,222	125,753	–	–
	---------	---------	----	----

21. Provisions

Group	Deferred tax (note 22)
	£
At 1 July 2018	284,977
Charge against provision	( 284,977)
	---------
At 30 June 2019	–
	---------

The company does not have any provisions.

22. Deferred tax

The deferred tax included in the statement of financial position is as follows:

	Group		Company
	2019	2018	2019	2018
	£	£	£	£
Included in provisions (note 21)	–	284,977	–	–
	----	---------	----	----

The deferred tax account consists of the tax effect of timing differences in respect of:

	Group		Company
	2019	2018	2019	2018
	£	£	£	£
Accelerated capital allowances	–	284,977	–	–
	----	---------	----	----

23. Employee benefits

Defined contribution plans

The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 47,702 (2018: £ 19,926 ).

24. Financial instruments

The carrying amount for each category of financial instrument is as follows:

Financial assets that are debt instruments measured at amortised cost

	Group
	2019	2018
	£	£
Financial assets that are debt instruments measured at amortised cost	6,917,311	9,356,289
	------------	------------

Financial liabilities measured at amortised cost

	Group
	2019	2018
	£	£
Financial liabilities measured at amortised cost	132,598,582	157,145,615
	--------------	--------------

25. Interest rate swaps

The group enters into interest rate swaps to help mitigate the effect of changes in interest rates on variable rate debt. At 30 June 2019 these had a valuation of £1,464 (2018: £580) which is not considered to be materially different to their fair value at that date, and they have not been recognised in the statement of financial position as they are not considered to be material.

26. Called up share capital

Issued, called up and fully paid

	2019		2018
	No.	£	No.	£
Ordinary shares of £ 1 each	300	300	300	300
	----	----	----	----

27. Reserves

Profit and loss account - This reserve records retained earnings and accumulated losses . Merger reserve - This reserve reflects the difference between the cost of investment and the nominal value of the share capital acquired in the group reconstruction.

28. Operating leases

The total future minimum lease payments under non-cancellable operating leases are as follows:

	Group		Company
	2019	2018	2019	2018
	£	£	£	£
Not later than 1 year	35,006	–	–	–
Later than 1 year and not later than 5 years	98,091	–	–	–
	---------	----	----	----
	133,097	–	–	–
	---------	----	----	----

29. Contingencies

Included in other creditors is an amount of £902,027(2018: £962,335) owed by a subsidiary company for which a director has given a personal guarantee.

30. Directors' advances, credits and guarantees

During the year the directors entered into the following advances and credits with the company and its subsidiary undertakings:

	2019
	Balance brought forward	Advances/ (credits) to the directors	Amounts repaid	Balance outstanding
	£	£	£	£
P Kearney	( 1,659,351)	( 264,001)	138,314	( 1,785,038)
	------------	---------	---------	------------

	2018
	Balance brought forward	Advances/ (credits) to the directors	Amounts repaid	Balance outstanding
	£	£	£	£
P Kearney	( 321,974)	( 1,337,377)	–	( 1,659,351)
	---------	------------	----	------------

31. Related party transactions

Group

Company

Control Mr P Kearney is the shareholder of Kilmona Group Limited and as such is considered to be the group's ultimate controlling party. Transactions The company has availed of the exemption from disclosing related party transactions with group companies, under Financial Reporting Standard No 102, Section 33, Related Party Disclosures. During the year a related party under common control of the directors collected rents and service charges on behalf of the group companies. At 30 June 2019, a balance of £620,056 (2018: £776,989) was owed to group companies. During the year a subsidiary company incurred expenditure on behalf of another related party under common control of the directors. At 30 June 2019, a balance of £Nil (2018: £76,146) was owed to the group. Loans have been provided to subsidiary companies by a company under common control of the directors. At 30 June 2019, a balance of £10,890,248 (2018: £8,483,725) was owed by the group.