Company registration number 05284463 (England and Wales)
CATERHAM CARS GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
CATERHAM CARS GROUP LIMITED
COMPANY INFORMATION
Directors
R Laishley
H Saimen
K Takahashi
T Yamazaki
Secretary
T Steel
Company number
05284463
Registered office
Unit 10
Rennie Drive
Dartford
Kent
England
DA1 5FD
Auditor
UHY Hacker Young Manchester LLP
St James Building
79 Oxford Street
Manchester
M1 6HT
CATERHAM CARS GROUP LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 20
CATERHAM CARS GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -
The directors present the strategic report for the year ended 31 March 2024.
Principal activities
The principal activity of the company continued to be that of a holding company.
Caterham Cars Group Limited
The company is the holding company of the group's investments.
The review of the principal subsidiary's activity is as follows:
Caterham Cars Limited
Fair review of the business and future events
The directors are disappointed to report a further operating loss for the period to 31 March 2024, following a loss also reported in the previous accounting period. The directors and the company’s ultimate parent company remain committed and focussed on turning the business back into regular profits and a 5-year business plan has been developed which forecasts strong medium-term growth and profits.
In support of this plan and to continue to give the company the foundation to achieve this, the company’s ultimate parent company, VT Holdings Co. Ltd, demonstrated its continuing commitment to the company with a further capitalisation of parent company debt to new equity totalling £4.5M on 27th March 2024. This additional investment was a direct capitalisation of funding provided in the preceding months to allow the business to fit out a new modern purpose-built factory, which the company then subsequently moved into shortly after the financial year end. This investment now concludes the initial up-front investments required to support the 5-year plans to secure the future of the business and to allow for growth of sales into new markets and new products.
Total revenues for the year were increased by 19% to £23.9M from £20.1M, driven primarily by a 20% increase in output of new cars to 541 from 450 in the previous year. Whilst the business still incurred some supply chain issues in the year, many of the previous year’s supply problems were resolved as the year progressed and this led to more stable monthly output for the majority of the year under review. Other revenue streams remained relatively unchanged in the year, except for a drop in used car and service revenues. This was caused by the decision in the previous year to exit direct retailing, and the company therefore ceased all direct used car and servicing operations from September 2023.
Not only was gross margin contribution higher in the year as a result of the higher revenues, but average weighted gross margin as a percentage was also improved from 20.9% to 24.2%. This was a partial reverse of the diluted margins that had been suffered in the previous year due to severe component inflation pressures that had hit the wider global economies during 2022. Further improvements in weighted margins were achieved as the year progressed as the business slowly switched back to selling more profitable models and the directors are now satisfied that the business has successfully reinstated sustainable gross margin levels going forward.
Despite the increased revenues and gross margin contribution achieved in the year, the business still operated at an output capacity level below breakeven and this was further worsened by significant new empty rental costs on the business’ new planned factory of around £650K while the business waited firstly for planning permission and then completion of building works to alter the building for final occupation, which happened immediately post year end. The directors are however confident that following a successful relocation, coupled with the corresponding reduction in duplicated rental costs, and return to normal operational output that the business is now structured to enable regular monthly profits to repay the long-term investments made.
Future developments
Immediately after the financial year the business has now successfully relocated to a new larger assembly, warehouse and office facility which allows for increased output capacity, improved customer-facing facilities and a better working environment for all staff. This concludes the initial long-term investment from the company’s parent to place the business on a solid foundation to grow existing markets and develop new demand for the Seven for the next decade.
CATERHAM CARS GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
Principal risks and uncertainties
Caterham Cars manufacture a luxury product that has global appeal and as such the company can be influenced by prevailing economic conditions and requirements in global car homologation legislation.
To mitigate this risk the company has a adopted a strategy whereby it homologates the majority of its model range to the standards of the European Community Small Series Type Approval (ECSSTA), thereby providing a common type approval for many markets and reducing costs and risks as this also gives significant future visibility of homologation compliance requirements. Before the UK’s exit from the EU on 1st January 2021, in order to retain the validity of the type approvals held under ECSSTA, the Company successfully completed a migration of these type approvals from the UK’s certification agency to the equivalent certification agency in Sweden, thus preserving their status.
R Laishley
Director
3 September 2024
CATERHAM CARS GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 March 2024.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
No preference dividends were paid.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
R Laishley
H Saimen
K Takahashi
T Yamazaki
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
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.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
CATERHAM CARS GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
On behalf of the board
R Laishley
Director
3 September 2024
CATERHAM CARS GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF CATERHAM CARS GROUP LIMITED
- 5 -
Opinion
We have audited the financial statements of Caterham Cars Group Limited (the 'company') for the year ended 31 March 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 2024 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the 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.
CATERHAM CARS GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF CATERHAM CARS GROUP LIMITED
- 6 -
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 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 company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Extent to which the audit was considered capable of detecting irregularities, including fraud
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, we considered the following:
the nature of the industry and sector, control environment and business performance;
any matters we identified having obtained and reviewed the Company’s documentation of their policies and procedures relating to:
identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; and
the matters discussed among the audit engagement team and involving relevant internal specialists, including tax, and industry specialists regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
CATERHAM CARS GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF CATERHAM CARS GROUP LIMITED
- 7 -
We also obtained an understanding of the legal and regulatory frameworks the company operates in, focussing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act and tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty.
Audit response to the risks identified
Our procedures to respond to risks identified included the following:
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
enquiring of management and those charged with governance concerning actual and potential litigation claims;
in addressing the risk of misstatement through inappropriate assessment of the carrying value of the fixed asset investment, testing the appropriateness of expected future revenues and assessing whether judgements made in utilising forecast assumptions are indicative of bias;
in assessing the risk of fraud through management override of controls, testing the appropriateness of journal entries and assessing whether judgements made in making accounting estimates are indicative of potential bias.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's member 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 the member 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, for our audit work, for this report, or for the opinions we have formed.
Paul Daly BEng FCA
Senior Statutory Auditor
For and on behalf of UHY Hacker Young Manchester LLP
3 September 2024
Chartered Accountants
Statutory Auditor
St James Building
79 Oxford Street
Manchester
M1 6HT
CATERHAM CARS GROUP LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 8 -
2024
2023
Notes
£
£
Turnover
-
-
Administrative expenses
283
Operating profit
3
283
-
Interest receivable and similar income
5
114,912
Interest payable and similar expenses
6
(114,912)
Amounts written off investments
8
(1,494,270)
-
Loss before taxation
(1,493,987)
Tax on loss
7
Loss for the financial year
(1,493,987)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
CATERHAM CARS GROUP LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Investments
8
12,056,120
9,050,390
Current assets
Debtors
10
1,106,280
6,287
Creditors: amounts falling due within one year
11
(100)
(390)
Net current assets
1,106,180
5,897
Total assets less current liabilities
13,162,300
9,056,287
Creditors: amounts falling due after more than one year
12
(1,100,000)
Net assets
12,062,300
9,056,287
Capital and reserves
Called up share capital
14
36,974,436
32,474,436
Share premium account
15
1,980,000
1,980,000
Capital redemption reserve
16
635,198
635,198
Profit and loss reserves
17
(27,527,334)
(26,033,347)
Total equity
12,062,300
9,056,287
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 3 September 2024 and are signed on its behalf by:
R Laishley
Director
Company registration number 05284463 (England and Wales)
CATERHAM CARS GROUP LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 April 2022
28,974,436
1,980,000
635,198
(26,033,347)
5,556,287
Year ended 31 March 2023:
Profit and total comprehensive income
-
-
-
Issue of share capital
14
3,500,000
-
-
3,500,000
Balance at 31 March 2023
32,474,436
1,980,000
635,198
(26,033,347)
9,056,287
Year ended 31 March 2024:
Loss and total comprehensive income
-
-
-
(1,493,987)
(1,493,987)
Issue of share capital
14
4,500,000
-
-
4,500,000
Balance at 31 March 2024
36,974,436
1,980,000
635,198
(27,527,334)
12,062,300
CATERHAM CARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
1
Accounting policies
Company information
Caterham Cars Group Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 10, Rennie Drive, Dartford, England, DA1 5FD.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
The financial statements of the company are consolidated in the financial statements of VT Holdings Ltd. These consolidated financial statements are available from its registered office in Japan and via that company's corporate website.
The company has taken advantage of the exemption under section 401 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
1.2
Going concern
Caterham Cars Group Limited continues as a non-trading holding company, whilst its subsidiaries Caterham Cars Ltd, Seven Motorsport Limited and Caterham Evo Limited continue to trade. The directors of the company have considered the future performance of the group in the light of the current economic climate and the results of trading to date. They have forecast the likely result to the end of August 2025 and the associated funding requirement.true
The group's underlying forecasts and projections, taking account of reasonably possible changes in trading performance caused by the group's exposure to global supply chain issues and increasing cost inflation in the UK, showed that the company's principal trading subsidiaries should be able to operate within the level of its current working capital funds and available facilities as supported by VT Holdings Co. Ltd.
Having considered all factors noted above the directors have not identified any material uncertainties in relation to going concern. They have a reasonable expectation that the company and its group has adequate resources to continue in operational existence for the foreseeable future being at least 12 months from the date of the approval of the financial statements. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
CATERHAM CARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 12 -
1.3
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.4
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.5
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 debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
CATERHAM CARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 13 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.6
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
CATERHAM CARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
1.7
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Investment in subsidiaries (impairment)
The directors consider the key estimation uncertainty to arise from the assessment of accumulated impairment losses in respect of the company's investments in its subsidiaries. Investments in subsidiaries are assessed for impairment at each reporting date and any impairment losses or reversal of impairment losses are recognised immediately in the profit and loss.
Determining whether an investment is impaired requires an estimation of the future benefit derived from the investment. This calculation requires the entity to estimate the future cash flows expected to flow from the subsidiary having taken account of an appropriate discount rate and return period. At the reporting date the company's aggregate investments were determined to be carrying a total of £1,494,270 impairment losses.
3
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
CATERHAM CARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 15 -
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Total
5
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest receivable from group companies
114,912
6
Interest payable and similar expenses
2024
2023
£
£
Interest payable to group undertakings
114,912
CATERHAM CARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 16 -
7
Taxation
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Loss before taxation
(1,493,987)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
(373,497)
Effect of revaluations of investments
373,568
Losses carried forward
(71)
Taxation charge for the year
-
-
8
Fixed asset investments
2024
2023
Notes
£
£
Investments in subsidiaries
9
12,056,120
9,050,390
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 April 2023
9,050,390
Additions
4,500,000
At 31 March 2024
13,550,390
Impairment
At 1 April 2023
-
Impairment losses
1,494,270
At 31 March 2024
1,494,270
Carrying amount
At 31 March 2024
12,056,120
At 31 March 2023
9,050,390
9
Subsidiaries
Details of the company's subsidiaries at 31 March 2024 are as follows:
CATERHAM CARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
9
Subsidiaries
(Continued)
- 17 -
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Seven Motorsport Limited
England
Supply and fitment of parts to the Caterham Seven car
Ordinary
100.00
Caterham Cars Ltd
England
Manufacturer of cars
Ordinary
100.00
Caterham Evo Limited
England
Research and development of electric vehicles
Ordinary
100.00
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
Seven Motorsport Limited
30,476
(6,080)
Caterham Cars Ltd
5,083,958
(2,060,059)
Caterham Evo Limited
435,186
(64,814)
10
Debtors
2024
2023
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
1,106,280
6,287
11
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
100
100
Accruals and deferred income
290
100
390
12
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Other borrowings
13
1,100,000
CATERHAM CARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 18 -
13
Loans and overdrafts
2024
2023
£
£
Loans from group undertakings
1,100,000
Payable after one year
1,100,000
Loans from group undertakings have a maturity date of 31 October 2025. Interest (paid monthly) in respect of this loan is at a rate of 6.460%.
14
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
34,904,436
30,404,436
34,904,436
30,404,436
A1 Ordinary shares of £1 each
357,142
357,142
357,142
357,142
A2 Ordinary shares of £1 each
442,858
442,858
442,858
442,858
35,704,436
31,204,436
35,704,436
31,204,436
2024
2023
2024
2023
Preference share capital
Number
Number
£
£
Issued and fully paid
Redeemable Preference Shares of 1p each
2,000,000
2,000,000
20,000
20,000
'A' Redeemable Preference Shares of £1 each
1,250,000
1,250,000
1,250,000
1,250,000
3,250,000
3,250,000
1,270,000
1,270,000
Preference shares classified as equity
1,270,000
1,270,000
Total equity share capital
36,974,436
32,474,436
CATERHAM CARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
14
Share capital
(Continued)
- 19 -
The 'A' Redeemable Preference shares can only be redeemed at the company's behest and have therefore been accounted for as equity in the company. The 'A' Redeemable Preference shares carry no rights to vote or to dividends.
The 2,000,000 Redeemable Preference Shares do not have a final redemption date and are now redeemable at the company's discretion only and accordingly are accounted for as equity in the company. The share premium of £1,980,000 and nominal value of the Redeemable Preference shares of £20,000 are shown in capital and reserves.
The Redeemable Preference shares and 'A' Redeemable Preference Shares may be redeemed in instalments of not less than 100,000 in the following order:
a) one half of the amount paid up on the 'A' Redeemable Preference shares
b) the Redeemable Preference shares
c) the other half of the amount paid up on the 'A' Redeemable Preference shares
The Ordinary shares, the A1 Ordinary shares, and the A2 Ordinary shares rank pari passu in respect of voting rights. In the event of a winding up of the company, that assets available for distribution amongst the shareholders will be as set out in section 3.2 of the Articles of Association.
On the 27 March 2024 the company allotted 4,500,000 ordinary shares at a nominal value of £1 per share. No shares were allotted other than for cash.
15
Share premium account
2024
2023
£
£
At the beginning and end of the year
1,980,000
1,980,000
16
Capital redemption reserve
2024
2023
£
£
At the beginning and end of the year
635,198
635,198
17
Profit and loss reserves
2024
2023
£
£
At the beginning of the year
(26,033,347)
(26,033,347)
Loss for the year
(1,493,987)
At the end of the year
(27,527,334)
(26,033,347)
CATERHAM CARS GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
18
Ultimate controlling party
The directors consider the ultimate parent undertaking as at 31 March 2024 to be VT Holdings Co. Ltd, which is incorporated in Japan.
VT Holdings Co. Ltd is the largest company for which consolidated accounts including Seven Motorsport Limited were prepared for the period ended 31 March 2024. The consolidated accounts of VT Holdings Co. Ltd are available from it's registered office in Japan and via that company's corporate website.
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