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Registered number: 07946138









TONKOTSU LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2023

 
TONKOTSU LIMITED
 
 
COMPANY INFORMATION


Directors
E Reynolds 
S Toxvaerd 
K Yamada 
M Statham 




Company secretary
K Yamada



Registered number
07946138



Registered office
Stour Valley Business Centre
Brundon Lane

Sudbury

CO10 7GB




Independent auditors
WMT
Chartered Accountants and Statutory Auditors

4 Beaconsfield Road

St Albans

Hertfordshire

AL1 3RD





 
TONKOTSU LIMITED
 

CONTENTS



Page
Strategic Report
1 - 3
Directors' Report
4 - 5
Independent Auditors' Report
6 - 9
Statement of Comprehensive Income
10
Balance Sheet
11
Statement of Changes in Equity
12
Statement of Cash Flows
13 - 14
Analysis of Net Debt
15
Notes to the Financial Statements
16 - 30


 
TONKOTSU LIMITED
 
 
STRATEGIC REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023

Introduction
 
The Directors present their report and the financial statements for the period ended 31 December 2023

Business review
 
The Company operates a group of ramen bars in the UK. The Group's objective is to continue to grow profitably, generating positive cash flows through its trading operations to fund further site acquisition. This is achieved by providing excellent quality consistent food and service in a relaxed setting.
Results and performance
In the year to 31st December 2023 the Company performance was good but continued to be impacted by external headwinds including train strikes, high inflation and the cost of living crisis. The business grew sales +11% like for like versus 2022 and opened a new site in Clapham in September which opened well. 

Page 1

 
TONKOTSU LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023

Principal risks and uncertainties
 
Inflation
Inflation remained high during 2023 but the rate of inflation is beginning to stabilise. The business has been able to cover the majority of cost pressures through menu price increases, but not to the full extent of maintaining margins. This business will continue to focus on agreeing the best supply agreements and minimise costs where possible but anticipate taking further menu price increases to regain the margin percentage lost in this time. Utilities pricing has been trending down across 2023. The business has been able to take advantage of these decreases thanks to the basket purchasing scheme they are part of. The basket has also been able to forward buy some of the future volume to manage risk of spot prices increasing significantly.
Economic uncertainties
The Company has performed well in more and less favourable economic situations over the last 10 years but there is always at risk of potential reduced revenue due to outside influences and general economic trends. Increases in interest rates have impacted disposable incomes for many which has reduced disposable incomes. The Company has been careful to keep menu pricing competitive and focus on profit enhancement measures where possible to increase resilience to these impacts. 
Train Strikes
Train strikes occurred at regular intervals and have a significant impact on sales on and around the days they occur. It seems the disputes are likely to continue for the foreseeable future. 
Liquidity Risk
The Company manages its cash and borrowing requirements in order to meet its needs, maximise interest income and minimise interest expense; whilst ensuring the Group has sufficient liquid assets to underwrite the operating and growth plans of the business.
Interest Rate Risk
The Group is exposed to interest rate risk on loans. The Directors monitor this risk regularly and consider likely interest rates when deciding large expenditure outgoings.
Credit Risk
The group invests cash surpluses through banks and companies which fulfil credit rating criteria approved by the board. Given the nature of the industry business on credit is relatively low, and is spread across a large number of accounts.
The process of risk acceptance and risk management is addressed through a process whereby proposals and matters of interest are subject to Board discussion and approval. 

Page 2

 
TONKOTSU LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023

Financial key performance indicators
 
The Company monitors its progress through close comparison of the performance of each individual restaurant, measured through a number of KPIs:  
- Operational and customer satisfaction metrics 
- Sales performance and profitability of each restaurant and outlet against both the budgeted profitability and the
  prior period's profitability. 
- Staff recruitment and retention. 
- Cashflow management of the Company against budgeted cashflow, taking particular account of capital 
  expenditure.
Senior management constantly review processes and procedures with a view to improve controls & working practices

Future Developments
 
In the coming year, the Company's objectives remain consistent, maximising conversion to generate cash to open new site locations.  


This report was approved by the board and signed on its behalf.



M Statham
Director

Date: 26 July 2024

Page 3

 
TONKOTSU LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023

The Directors present their report and the financial statements for the period ended 31 December 2023.

Directors' responsibilities statement

The Directors are responsible for preparing the Strategic Report, the 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the Directors are required to:


select suitable accounting policies for the Company's financial statements 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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Principal activity

The principal activity of the Company continued to be that of hospitality and leisure.

Results and dividends

The loss for the period, after taxation, amounted to £211,529 (2022 - loss £560,618).



Directors

The Directors who served during the period were:

E Reynolds 
S Toxvaerd 
K Yamada 
M Statham 

Page 4

 
TONKOTSU LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023

Engagement with employees

We here at Tonkotsu believe that it is our people that are our most valuable resource.  As an organisation we must invest in our people in order to develop and maintain the excellent standard of service that our customers expect. Tonkotsu is committed to the continuous development of its employees through a planned and structured approach to learning. The environment we work in and our customers’ expectations are constantly changing.  All of our employees will have access to the training and development they need to enable them to meet the challenges ahead.
Company updates including financial performance are shared in multiple ways including our social platform blink, group meetings and face to face meet ups in restaurants. Restaurant management teams are incentivised to be actively involved in the company performance with a bonus scheme. Employee surveys are run periodically with follow-up forums for employees to share their views and suggestions. These are reviewed and acted on or responses given during group forums.
We believe that all decisions about and treatment of people at work should be based on the individual’s abilities, skills, performance and behaviour, and our business requirements. Questions of individual’s age, race, culture, colour, disability, ethnicity, gender, marital or civil partnership status, nationality, religion or belief, political opinion, sexuality, sexual orientation, gender reassignment, pregnancy, part-time or fixed term status or any other distinction should not be relevant or considered for the purposes of recruitment, development, remuneration and promotion.
Disability should only be considered in the context of the requirements of the job and the Tonkotsu policy is to encourage the employment of disabled people where reasonably practical. The requirements of job applicants and existing employees who have a disability will be reviewed to ensure that wherever possible reasonable adjustments are made to enable them to perform as well as possible during the recruitment process and while employed by Tonkotsu. Opportunities for promotion, access to benefits and facilities of employment will not be unreasonably limited and all reasonable adjustments will be made. All reasonable measures will be taken to ensure that disabled employees are given the opportunity to participate fully in the workplace in training and career opportunities.

Disclosure of information to auditors

Each of the persons who are Directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the Director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Auditors

The auditorsWMTwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 



M Statham
Director

Date: 26 July 2024

Page 5

 
TONKOTSU LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TONKOTSU LIMITED
 

Opinion


We have audited the financial statements of Tonkotsu Limited (the 'Company') for the period ended 31 December 2023, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 December 2023 and of its loss for the period then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.


Conclusion relating to going concern


In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.


Page 6

 
TONKOTSU LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TONKOTSU LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The Directors are responsible for the other information contained within the Annual ReportOur opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


Opinion 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 period 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 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, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of Directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 4, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


In preparing the financial statements, the Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


Page 7

 
TONKOTSU LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TONKOTSU LIMITED (CONTINUED)


Auditors' 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 Auditors' 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.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity. 
The following laws and regulations were identified as being of significance to the entity: 
• Those laws and regulations considered to have a direct effect on the financial statements include UK
          financial reporting standards, Company Law and Pensions legislation.
• Those laws and regulations for which non-compliance may be fundamental to the operating aspects of
          the business and therefore may have a material effect on the financial statements include health and 
          safety legislation, employment law and data protection.
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; review of board minutes; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.


Page 8

 
TONKOTSU LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TONKOTSU LIMITED (CONTINUED)





Graham Wintle (Senior Statutory Auditor)
  
for and on behalf of
WMT
 
Chartered Accountants and Statutory Auditors
  
4 Beaconsfield Road
St Albans
Hertfordshire
AL1 3RD

 
Date: 
26 July 2024
Page 9

 
TONKOTSU LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
 4 
13,781,615
11,862,901

Cost of sales
  
(3,155,258)
(2,735,342)

Gross profit
  
10,626,357
9,127,559

Administrative expenses
  
(10,789,658)
(9,844,738)

Other operating income
 5 
-
56,222

Operating loss
 6 
(163,301)
(660,957)

Interest receivable and similar income
 10 
4,470
1,220

Interest payable and similar expenses
 11 
(53,955)
(52,534)

Loss before tax
  
(212,786)
(712,271)

Tax on loss
 12 
56,884
151,653

Loss for the financial period
  
(155,902)
(560,618)

Other comprehensive income for the period
  

Total comprehensive income for the period
  
(155,902)
(560,618)

The notes on pages 16 to 30 form part of these financial statements.

Page 10

 
TONKOTSU LIMITED
REGISTERED NUMBER: 07946138

BALANCE SHEET
AS AT 31 DECEMBER 2023

31 December
25 December
2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 13 
4,131,913
4,182,092

  
4,131,913
4,182,092

Current assets
  

Stocks
 14 
174,298
168,644

Debtors: amounts falling due within one year
 15 
863,688
1,045,465

Cash at bank and in hand
  
655,924
571,457

  
1,693,910
1,785,566

Creditors: amounts falling due within one year
 16 
(2,787,070)
(2,706,453)

Net current liabilities
  
 
 
(1,093,160)
 
 
(920,887)

Total assets less current liabilities
  
3,038,753
3,261,205

Creditors: amounts falling due after more than one year
 17 
(1,042,724)
(1,109,274)

  

Net assets
  
1,996,029
2,151,931


Capital and reserves
  

Called up share capital 
 20 
2,816
2,816

Share premium account
 21 
6,355,896
6,355,896

Profit and loss account
 21 
(4,362,683)
(4,206,781)

  
1,996,029
2,151,931


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 



K Yamada
M Statham
Director
Director


Date: 26 July 2024
Date: 26 July 2024

The notes on pages 16 to 30 form part of these financial statements.

Page 11

 
TONKOTSU LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2023


Called up share capital
Share premium account
Profit and loss account
Total equity

£
£
£
£


At 1 December 2021
2,816
6,355,896
(3,646,163)
2,712,549


Comprehensive income for the year

Loss for the year
-
-
(560,618)
(560,618)
Total comprehensive income for the year
-
-
(560,618)
(560,618)



At 26 December 2022
2,816
6,355,896
(4,206,781)
2,151,931


Comprehensive income for the period

Loss for the period
-
-
(155,902)
(155,902)
Total comprehensive income for the period
-
-
(155,902)
(155,902)


At 31 December 2023
2,816
6,355,896
(4,362,683)
1,996,029


The notes on pages 16 to 30 form part of these financial statements.

Page 12

 
TONKOTSU LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 DECEMBER 2023

31 December
25 December
2023
2022
£
£

Cash flows from operating activities

Loss for the financial period
(155,902)
(560,618)

Adjustments for:

Depreciation of tangible assets
723,380
699,372

Loss on disposal of tangible assets
-
1,481

Government grants
-
(56,222)

Interest paid
53,955
52,534

Interest received
(4,470)
(1,220)

Taxation charge
(55,627)
(151,653)

(Increase) in stocks
(5,654)
(27,663)

Decrease/(increase) in debtors
106,881
(189,441)

(Increase) in amounts owed by groups
(21,138)
(81,536)

Increase in creditors
68,511
368,573

Corporation tax (paid)/received
(1,257)
-

Net cash generated from operating activities

708,679
53,607


Cash flows from investing activities

Purchase of tangible fixed assets
(673,201)
(548,402)

Government grants received
-
56,222

Interest received
4,470
1,220

HP interest paid
(1,282)
-

Joint ventures interest received
152,918
118,661

Net cash from investing activities

(517,095)
(372,299)

Cash flows from financing activities

Repayment of loans
(80,016)
(228,816)

Repayment of other loans
(7,146)
(12,250)

Repayment of/new finance leases
32,718
-

Interest paid
(52,673)
(52,534)

Net cash used in financing activities
(107,117)
(293,600)

Net increase/(decrease) in cash and cash equivalents
84,467
(612,292)

Cash and cash equivalents at beginning of period
571,457
1,183,749

Cash and cash equivalents at the end of period
655,924
571,457
Page 13

 
TONKOTSU LIMITED
 

STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023

31 December
25 December

2023
2022

£
£



Cash and cash equivalents at the end of period comprise:

Cash at bank and in hand
655,924
571,457

655,924
571,457


The notes on pages 16 to 30 form part of these financial statements.

Page 14

 
TONKOTSU LIMITED
 

ANALYSIS OF NET DEBT
FOR THE PERIOD ENDED 31 DECEMBER 2023





At 26 December 2022
Cash flows
New finance leases
At 31 December 2023
£

£

£

£

Cash at bank and in hand

571,457

84,467

-

655,924

Debt due after 1 year

(1,109,274)

85,729

-

(1,023,545)

Debt due within 1 year

(249,988)

1,433

-

(248,555)

Finance leases

-

-

(32,718)

(32,718)


(787,805)
171,629
(32,718)
(648,894)

The notes on pages 16 to 30 form part of these financial statements.

Page 15

 
TONKOTSU LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

1.


General information

Tonkotsu Limited is a company incorporated in England & Wales under the Companies Act 2006. The address of the registered office is given on the company information page. The nature of the Company's operations and its principal activities are set out in the Directors’ report.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Going concern

The Company is ultimately reliant on its financers, including Directors and shareholders. The Directors are confident that this support will continue for the foreseeable future and enable the Company to meet its working capital requirements, and on this basis deem it appropriate to prepare the financial statements on a going concern basis. 

 
2.3

Revenue

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:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Company has transferred the significant risks and rewards of ownership to the buyer;
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Page 16

 
TONKOTSU LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.4

Government grants

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.

 
2.5

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.6

Finance costs

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.

 
2.7

Borrowing costs

All borrowing costs are recognised in profit or loss in the period in which they are incurred.

 
2.8

Pensions

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.

 
2.9

Taxation

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.

 
2.10

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.

Page 17

 
TONKOTSU LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.11

Tangible fixed assets

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, using the straight-line method.

Depreciation is provided on the following basis:

Long-term leasehold property
-
Straight line over the life of the lease
Plant and machinery
-
5 years
Motor vehicles
-
10 years
Fixtures and fittings
-
5 years
Office equipment
-
5 years
Computer equipment
-
5 years

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.

 
2.12

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.13

Debtors

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.

 
2.14

Cash and cash equivalents

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.

In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

Page 18

 
TONKOTSU LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.15

Creditors

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.

 
2.16

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the Company's Balance Sheet when the Company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Page 19

 
TONKOTSU LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. The nature of estimation means the actual outcomes could differ from those estimates. There are no material judgments made in the preparation of the accounts.


4.


Turnover

2023
2022
£
£

Turnover
13,781,615
11,862,901

13,781,615
11,862,901


All turnover arose within the United Kingdom.


5.


Other operating income

2023
2022
£
£

Government grants receivable
-
56,222

-
56,222



6.


Operating loss

The operating loss is stated after charging:

2023
2022
£
£

Research & development charged as an expense
1,044
334

Other operating lease rentals
933,779
843,159


7.


Auditors' remuneration

During the period, the Company obtained the following services from the Company's auditors:


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
14,750
13,950

Fees payable to the Company's auditors for other services provided
2,875
2,700
Page 20

 
TONKOTSU LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

8.


Employees

Staff costs, including Directors' remuneration, were as follows:


2023
2022
£
£

Wages and salaries
5,153,303
4,629,828

Social security costs
432,145
408,107

Cost of defined contribution scheme
100,611
81,662

5,686,059
5,119,597


The average monthly number of employees, including the Directors, during the period was as follows:


        2023
        2022
            No.
            No.







Directors
4
4



Administration
13
8



Site staff
252
240

269
252


9.


Directors' remuneration

2023
2022
£
£

Directors salaries
358,416
332,896

Company contributions to defined contribution pension schemes
5,255
5,047

363,671
337,943


During the period retirement benefits were accruing to 4 Directors (2022 - 4) in respect of defined contribution pension schemes.

The highest paid Director received remuneration of 113,768 (2022 - £112,193).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid Director amounted to 1,321 (2022 - £1,318).

Page 21

 
TONKOTSU LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

10.


Interest receivable

2023
2022
£
£


Other interest receivable
4,470
1,220

4,470
1,220


11.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
24,673
24,534

Other loan interest payable
28,000
28,000

Finance leases and hire purchase contracts
1,282
-

53,955
52,534

Page 22

 
TONKOTSU LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

12.


Taxation


2023
2022
£
£

Corporation tax


Adjustments in respect of previous periods
(56,884)
(151,653)


Total current tax
(56,884)
(151,653)

Factors affecting tax charge for the period/year

The tax assessed for the period/year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 23.45% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Loss on ordinary activities before tax
(212,786)
(712,271)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.45% (2022 - 19%)
(49,874)
(135,331)

Effects of:


Fixed asset differences
54,634
52,226

Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
14,304
10,368

Utilisation of tax losses
-
72,737

Adjustments to tax charge in respect of prior periods
(39,066)
-

Adjustment in research and development tax credit leading to an increase (decrease) in the tax charge
(55,627)
(151,653)

Remeasurement of deferred tax for changes in tax rates
1,263
-

Unrelieved tax losses carried forward
17,482
-

Total tax charge for the period/year
(56,884)
(151,653)


Factors that may affect future tax charges

The Company has estimated losses of £3.1m (2022: £3.1mil) available for carry forward against future trading profits.

Page 23

 
TONKOTSU LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

13.


Tangible fixed assets







Long-term leasehold property
Plant and machinery
Motor vehicles
Fixtures and fittings
Office equipment

£
£
£
£
£



Cost or valuation


At 26 December 2022
4,301,169
1,621,906
-
1,573,863
165


Additions
327,608
111,262
40,615
169,716
-



At 31 December 2023

4,628,777
1,733,168
40,615
1,743,579
165



Depreciation


At 26 December 2022
1,141,711
984,855
-
1,246,250
165


Charge for the period on owned assets
323,008
217,029
-
152,850
-


Charge for the period on financed assets
-
-
4,062
-
-



At 31 December 2023

1,464,719
1,201,884
4,062
1,399,100
165



Net book value



At 31 December 2023
3,164,058
531,284
36,553
344,479
-



At 25 December 2022
3,159,458
637,051
-
327,613
-
Page 24

 
TONKOTSU LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

           13.Tangible fixed assets (continued)


Computer equipment
Total

£
£



Cost or valuation


At 26 December 2022
185,180
7,682,283


Additions
24,000
673,201



At 31 December 2023

209,180
8,355,484



Depreciation


At 26 December 2022
127,210
3,500,191


Charge for the period on owned assets
26,431
719,318


Charge for the period on financed assets
-
4,062



At 31 December 2023

153,641
4,223,571



Net book value



At 31 December 2023
55,539
4,131,913



At 25 December 2022
57,970
4,182,092

The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:


31 December
25 December
2023
2022
£
£



Motor vehicles
36,553
-

36,553
-

Page 25

 
TONKOTSU LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

14.


Stocks

31 December
25 December
2023
2022
£
£

Raw materials and consumables
174,298
168,644

174,298
168,644



15.


Debtors

31 December
25 December
2023
2022
£
£


Trade debtors
62,175
59,076

Amounts owed by group undertakings
102,674
81,536

Other debtors
456,434
610,318

Prepayments and accrued income
242,405
294,535

863,688
1,045,465


Page 26

 
TONKOTSU LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

16.


Creditors: Amounts falling due within one year

31 December
25 December
2023
2022
£
£

Bank loans
165,222
242,842

Other loans
83,333
7,146

Trade creditors
871,226
924,276

Other taxation and social security
669,119
552,530

Obligations under finance lease and hire purchase contracts
13,539
-

Other creditors
389,357
178,892

Accruals and deferred income
595,274
800,767

2,787,070
2,706,453


Bank loans are secured by way of fixed and floating charges over the assets of the Company. Other creditors includes a prior year adjustment consisting of a reclassification of bank overdrafts to other creditors. There is no change to either the profit and loss account or reserves.
The hire purchase creditor is secured over the asset it relates to.


17.


Creditors: Amounts falling due after more than one year

31 December
25 December
2023
2022
£
£

Bank loans
106,877
109,273

Other loans
916,668
1,000,001

Net obligations under finance leases and hire purchase contracts
19,179
-

1,042,724
1,109,274


Bank loans are secured by way of fixed and floating charges over the assets of the Company. Other loans include a prior year adjustment consisting of a reclassification of other creditors to other loans.There is no change to either the profit or loss account or reserves. 
The hire purchase creditor is secured over the asset it relates to.

Page 27

 
TONKOTSU LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

18.


Loans


Analysis of the maturity of loans is given below:


31 December
25 December
2023
2022
£
£

Amounts falling due within one year

Bank loans
165,222
242,842

Other loans
83,333
7,146

Amounts falling due 1-2 years

Bank loans
55,259
109,273

Other loans
200,000
83,333

Amounts falling due 2-5 years

Bank loans
51,618
-

Other loans
400,000
400,000

Amounts falling due after more than 5 years

Other loans
316,668
516,668

316,668
516,668

1,272,100
1,359,262


Bank loans are secured by way of fixed and floating charges over the assets of the Company.
The hire purchase creditor is secured over the asset it relates to.


19.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

31 December
25 December
2023
2022
£
£


Within one year
13,539
-

Between 1-5 years
13,539
-

Over 5 years
5,640
-

32,718
-

Page 28

 
TONKOTSU LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

20.


Share capital

31 December
25 December
2023
2022
£
£
Allotted, called up and fully paid



120,995 (2022 - 120,995) A Ordinary shares of £0.0100 each
1,210
1,210
105,193 (2022 - 105,193) Y Ordinary shares of £0.0100 each
1,052
1,052
370,676 (2022 - 370,676) P Preference shares of £0.0001 each
37
37
5,170,000 (2022 - 5,170,000) P1 Preference shares of £0.0001 each
517
517

2,816

2,816


At the period end there existed share options over 49,651 F Ordinary shares of £0.01 each in respect of an EMI share option scheme.


21.


Reserves

Share premium account

The share premium relates to shares that were issued above par.

Profit and loss account

The profit and loss account represents the distributable reserves of the Company


22.


Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £100,611 (2022: £82,761). Contributions totalling £17,960 (2022: £15,830) were payable to the fund at the balance sheet date and are included in creditors.

Page 29

 
TONKOTSU LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023

23.


Commitments under operating leases

At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

31 December
25 December
2023
2022
£
£


Not later than 1 year
864,373
811,263

Later than 1 year and not later than 5 years
3,709,782
3,532,719

Later than 5 years
5,120,744
5,752,084

9,694,899
10,096,066


24.


Related party transactions

Tsuru Limited has directors and shareholders in common with Tonkotsu Limited, making it a related party. At the balance sheet date, the amount owed to the Company by Tsuru Limited was £102,674 (2022: £81,536). Tsuru Limited paid a management charge to Tonkotsu Limited of £267,670 (2022: £199,201).
At the year end date there was an oustanding loan owed to a shareholder of £1,000,001 
(2022: £1,007,147). Interest of 2.8% per annum is charged on this loan and it is repayable over multiple years.

 
Page 30