Company registration number 11321148 (England and Wales)
GRANTHAM CAPITAL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 DECEMBER 2023
GRANTHAM CAPITAL LIMITED
COMPANY INFORMATION
Director
Mr H S Kandhari
Company number
11321148
Registered office
Gonerby Road
Gonerby Hill Foot
Grantham
Lincolnshire
NG31 8HE
Auditor
KLSA LLP
Kalamu House
11 Coldbath Square
London
EC1R 5HL
GRANTHAM CAPITAL LIMITED
CONTENTS
Page
Strategic report
1 - 2
Director's report
3
Director's responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Group statement of comprehensive income
9
Group balance sheet
10 - 11
Company balance sheet
12
Group statement of changes in equity
13
Company statement of changes in equity
14
Group statement of cash flows
15
Company statement of cash flows
16
Notes to the financial statements
17 - 37
GRANTHAM CAPITAL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 DECEMBER 2023
- 1 -

The director presents the strategic report for the year ended 30 December 2023.

Review of the business

Turnover for the year ended December 2022 was £27,148,787 (2022: £28,168,653). During the year the group has been largely successful in retaining key contracted business and also added to its growing portfolio of new products, contracts and service offering.

 

As show in the group's profit and loss account set out on page 9, the group made profit after tax of £655,089 (2022: £947,053).

 

The group's balance sheet on page 10, shows the financial position remained strong with net assets valued at £3,720,914 (2022: £2,889,825) with significant investment in manufacturing facilities and information technology enhancement and upgrades.

 

Cash position as at the end of December 2022 of £2,837,137 (2022: £976,449) remained healthy.

 

The group this year increased its operating profits and retained creditable level of gross profitability in 2023 against the continuing consolidation in the UK Tyre Market and rising raw material input costs. The group has reacted well to these changes by establishing new partnerships and with improved efficiency helping to offset cost pressures.

 

Further development in the group's fleet management systems continue to bear fruit in competing with the new tyre manufacturers, helping us to continue to add new fleet management contracts to our growing portfolio as well as renewing key long-term contracts.

 

Manufacturing quality remains key for the group and the group made further improvements through targeted investments in modern production and control systems. This has enabled us to boost productivity and quality to ensure we can maintain a competitive edge. All our manufacturing processes are controlled and audited to ISO standards.

 

Our principal activity of re-treading of truck tyres, supported by a fleet management system enables the group to provide its customers with a fully integrated tyre solution, tailored to their specific needs whilst reducing the impact on the environment and offering a first class, cost-effective tyre management package. New products and services will be introduced to complement this strategy.

 

We aim to provide the best products and exceptional value for money for all our customers, with the retained profits re-invested in product manufacturing initiatives and specific fleet management system developments. This strategy will support sales growth and protect profits ensuring further investments can be made to reduce unit costs, support innovation and maintain the group's position as the premier UK provider of single source tyre solutions.

Principal risks and uncertainties

The group's activities expose it to a number of financial risks:

 

Cashflow risk - the group manages cashflow at all levels within the business and has more than adequate funding to manage variations in working capital in place.

 

Credit risk - the credit risk is primarily attributed to its trade receivables. The group has credit insurance for the majority of its debtors and works with many low risk council and other municipal customers. The amounts presented in the statement of financial position are net of allowances for doubtful receivables.

 

Foreign exchange risk - This is minimised wherever possible by acquiring foreign currency which it holds as a cash balance.

 

Price risk - as with the industry in general the company is exposed to the changing price of rubber and energy although were possible forward contracts are used to mitigate this exposure. Many of the group's customers are also under contracts that allow this core, commodity driven price increase to be passed on to them.

GRANTHAM CAPITAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 DECEMBER 2023
- 2 -
Development and performance

Despite the challenges faced in the year the Director is satisfied with the overall financial performance and considers that the group has the necessary resources available for the future investments needs over the coming period to continue to support a sustainable level of profit and seek to take advantage of any further business development opportunities as they arise.

Key performance indicators

The key financial indicators for the performance of the group are gross profit margin and turnover. The gross profit of the company for the period under review was £11m (2022: £9m) and turnover of £27.1m (2022: £28.1m). The key non financial performance indicators are client service and satisfaction and shareholder relationships.

On behalf of the board

Mr H S Kandhari
Director
23 September 2024
GRANTHAM CAPITAL LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 30 DECEMBER 2023
- 3 -

The director presents his annual report and financial statements for the year ended 30 December 2023.

Principal activities

The principal activity of the company and group is that of holding company and repair and reconditioning of tyres, the sale of tyres and equipment for tyre reconditioning and servicing, and the provision of comprehensive tyre management services to its fleet logistics and waste management customers.

Results and dividends

The results for the year are set out on page 8.

No ordinary dividends were paid. The director does not recommend payment of a further dividend.

Director

The director who held office during the year and up to the date of signature of the financial statements was as follows:

Mr H S Kandhari
Auditor

The auditors, KLSA LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.

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 auditor of the company 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 auditor of the company is aware of that information.

On behalf of the board
Mr H S Kandhari
Director
23 September 2024
GRANTHAM CAPITAL LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 DECEMBER 2023
- 4 -

The director is responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the director is required to:

 

 

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

GRANTHAM CAPITAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GRANTHAM CAPITAL LIMITED
- 5 -
Opinion

We have audited the financial statements of Grantham Capital Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 December 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows 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:

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 and parent 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 director's 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 group's and parent 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 director with respect to going concern are described in the relevant sections of this report.

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 director is 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:

GRANTHAM CAPITAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GRANTHAM CAPITAL LIMITED
- 6 -
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 their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's 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:

Responsibilities of director

As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is responsible for assessing 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 director either intends to liquidate the parent company or to cease operations, or has 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.

We also considered potential fraud drivers: including financial or other pressures, opportunity, override of controls and personal or corporate motivations. We considered the programmes and controls that the company has established to address risks identified, or that otherwise prevent, deter and detect fraud. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included testing journals, evaluating the business rationale of significant transactions outside the normal course of business and validating the appropriateness of internal controls and significant accounting estimations based on our fraud risk criteria;

 

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

To address the risk of fraud through management bias and override of controls, we:

GRANTHAM CAPITAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GRANTHAM CAPITAL LIMITED
- 7 -

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

We obtained understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant are those related to the financial reporting framework, tax regulations in the jurisdictions in which the company operates.

 

Based on this understanding we designed our audit procedures to identify non-compliance with laws and regulations. Our procedures involved: making enquiries of management, those responsible for legal and compliance procedures and reviewing other correspondence.

 

We communicated identified fraud risks and non-compliance with laws and regulations with those charged with governance, throughout the audit team and remained alert to any indications throughout the audit.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. 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, 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.

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 2006. Our 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 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 members as a body, for our audit work, for this report, or for the opinions we have formed.

Harsheel Dodhia (Senior Statutory Auditor)
For and on behalf of KLSA LLP
23 September 2024
Chartered Accountants
Statutory Auditor
Kalamu House
11 Coldbath Square
London
EC1R 5HL
GRANTHAM CAPITAL LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
27,148,787
28,168,653
Cost of sales
(16,194,181)
(19,085,450)
Gross profit
10,954,606
9,083,203
Administrative expenses
(9,928,619)
(8,432,486)
Other operating income
115,759
149,296
Operating profit
4
1,141,746
800,013
Interest receivable and similar income
7
12,048
25,000
Interest payable and similar expenses
8
(456,774)
(156,565)
Fair value gains and losses on investment properties
12
50,000
-
0
Profit before taxation
747,020
668,448
Tax on profit
9
(91,931)
278,605
Profit for the financial year
655,089
947,053
Profit for the financial year is all attributable to the owners of the parent company.
GRANTHAM CAPITAL LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 DECEMBER 2023
- 9 -
2023
2022
£
£
Profit for the year
655,089
947,053
Other comprehensive income
Actuarial gain/(loss) on defined benefit pension schemes
176,000
(504,000)
Total comprehensive income for the year
831,089
443,053
Total comprehensive income for the year is all attributable to the owners of the parent company.
GRANTHAM CAPITAL LIMITED
GROUP BALANCE SHEET
AS AT
30 DECEMBER 2023
30 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Negative goodwill
10
(93,129)
(279,386)
Other intangible assets
10
1,925,429
-
0
Total intangible assets
1,832,300
(279,386)
Tangible assets
11
11,630,956
7,717,430
Investment property
12
350,000
300,000
13,813,256
7,738,044
Current assets
Stocks
15
7,030,234
5,395,762
Debtors
16
14,310,069
14,812,113
Cash at bank and in hand
2,837,137
976,449
24,177,440
21,184,324
Creditors: amounts falling due within one year
17
(23,992,454)
(22,809,121)
Net current assets/(liabilities)
184,986
(1,624,797)
Total assets less current liabilities
13,998,242
6,113,247
Creditors: amounts falling due after more than one year
18
(10,279,628)
(3,414,417)
Provisions for liabilities
Deferred tax liability
21
411,700
36,005
(411,700)
(36,005)
Net assets excluding pension surplus
3,306,914
2,662,825
Defined benefit pension surplus
22
414,000
227,000
Net assets
3,720,914
2,889,825
Capital and reserves
Called up share capital
23
1
1
Profit and loss reserves
3,720,913
2,889,824
Total equity
3,720,914
2,889,825

These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.

GRANTHAM CAPITAL LIMITED
GROUP BALANCE SHEET (CONTINUED)
AS AT
30 DECEMBER 2023
30 December 2023
- 11 -
The financial statements were approved and signed by the director and authorised for issue on 23 September 2024
23 September 2024
Mr H S Kandhari
Director
Company registration number 11321148 (England and Wales)
GRANTHAM CAPITAL LIMITED
COMPANY BALANCE SHEET
AS AT 30 DECEMBER 2023
30 December 2023
- 12 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investments
13
8,424,929
8,424,929
Current assets
Debtors
16
315,000
315,000
Cash at bank and in hand
3,700
18,901
318,700
333,901
Creditors: amounts falling due within one year
17
(8,744,285)
(8,759,285)
Net current liabilities
(8,425,585)
(8,425,384)
Net liabilities
(656)
(455)
Capital and reserves
Called up share capital
23
1
1
Profit and loss reserves
(657)
(456)
Total equity
(656)
(455)

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £202 (2022 - £147 loss).

The financial statements were approved and signed by the director and authorised for issue on 23 September 2024
23 September 2024
Mr H S Kandhari
Director
Company registration number 11321148 (England and Wales)
GRANTHAM CAPITAL LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 DECEMBER 2023
- 13 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 31 December 2021
1
2,446,771
2,446,772
Year ended 30 December 2022:
Profit for the year
-
947,053
947,053
Other comprehensive income:
Actuarial gains on defined benefit plans
-
(504,000)
(504,000)
Total comprehensive income
-
443,053
443,053
Balance at 30 December 2022
1
2,889,824
2,889,825
Year ended 30 December 2023:
Profit for the year
-
655,089
655,089
Other comprehensive income:
Actuarial gains on defined benefit plans
-
176,000
176,000
Total comprehensive income
-
831,089
831,089
Balance at 30 December 2023
1
3,720,913
3,720,914
GRANTHAM CAPITAL LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 DECEMBER 2023
- 14 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 31 December 2021
1
(309)
(308)
Year ended 30 December 2022:
Loss and total comprehensive income for the year
-
(147)
(147)
Balance at 30 December 2022
1
(456)
(455)
Year ended 30 December 2023:
Profit and total comprehensive income
-
(201)
(201)
Balance at 30 December 2023
1
(657)
(656)
GRANTHAM CAPITAL LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 DECEMBER 2023
- 15 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
27
2,858,379
(546,899)
Interest paid
(456,774)
(156,565)
R&D tax credit
283,764
278,605
Net cash inflow/(outflow) from operating activities
2,685,369
(424,859)
Investing activities
Write off of investments in subsidiaries
(324,935)
-
Purchase of tangible fixed assets
(7,205,842)
(3,830,513)
Proceeds on disposal of tangible fixed assets
(28,250)
-
Interest received
1,048
-
0
Net cash used in investing activities
(7,557,979)
(3,830,513)
Financing activities
(Repayment of)/proceeds from borrowings
7,102,000
(499,533)
(Repayment of)/proceeds from bank loans
(322,917)
(125,000)
Proceeds from/(repayment of) finance leases
(45,785)
159,832
Net cash generated from/(used in) financing activities
6,733,298
(464,701)
Net increase/(decrease) in cash and cash equivalents
1,860,688
(4,720,073)
Cash and cash equivalents at beginning of year
976,449
5,696,522
Cash and cash equivalents at end of year
2,837,137
976,449
GRANTHAM CAPITAL LIMITED
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 DECEMBER 2023
- 16 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
28
(15,201)
(147)
Net decrease in cash and cash equivalents
(15,201)
(147)
Cash and cash equivalents at beginning of year
18,901
19,048
Cash and cash equivalents at end of year
3,700
18,901
GRANTHAM CAPITAL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 DECEMBER 2023
- 17 -
1
Accounting policies
Company information

Grantham Capital Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Gonerby Road, Gonerby Hill Foot, Grantham, Lincolnshire, NG31 8HE.

 

The group consists of Grantham Capital Limited and all of its subsidiaries.

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.

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Grantham Capital Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 30 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

GRANTHAM CAPITAL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

 

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

 

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

1.4
Going concern

At the time of approving the financial statements, the director has a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

1.5
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.6
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

1.7
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 5 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

GRANTHAM CAPITAL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
1.8
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Software
20% on straight line basis
1.9
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold improvements
20% on straight line basis
Plant and equipment
12.5% on straight line basis
Fixtures and fittings
10% on straight line basis
Computers
at varying rates on straight line basis
Motor vehicles
20% on straight line basis

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

1.10
Investment property

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

1.11
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

GRANTHAM CAPITAL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -

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 group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

 

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

 

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.12
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

GRANTHAM CAPITAL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
1.13
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.14
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.

1.15
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and 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.

GRANTHAM CAPITAL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 DECEMBER 2023
1
Accounting policies
(Continued)
- 22 -
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 group 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 group 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.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

GRANTHAM CAPITAL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 DECEMBER 2023
1
Accounting policies
(Continued)
- 23 -
Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.16
Equity instruments

Equity instruments issued by the group 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 group.

1.17
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and 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. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.18
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.

1.19
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.

 

The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.

GRANTHAM CAPITAL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 DECEMBER 2023
1
Accounting policies
(Continued)
- 24 -

The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.

 

Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.

The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.

1.20
Leases

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

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

1.21
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the director is 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.

GRANTHAM CAPITAL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 DECEMBER 2023
- 25 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sales of tyres
27,148,787
28,168,653
2023
2022
£
£
Turnover analysed by geographical market
United kingdom
25,008,154
27,474,184
Europe
1,893,316
578,359
Others
247,317
116,110
27,148,787
28,168,653
2023
2022
£
£
Other revenue
Interest income
12,048
25,000
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange (gains)/losses
(909)
29,058
Research and development costs
20,501
10,819
Depreciation of owned tangible fixed assets
1,452,054
1,191,555
Loss on disposal of tangible fixed assets
28,250
-
Amortisation of intangible assets
239,768
-
Release of negative goodwill
(186,257)
(186,257)
Operating lease charges
199,500
203,000
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and its subsidiaries
27,118
21,170
GRANTHAM CAPITAL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 DECEMBER 2023
- 26 -
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Directors and administration
12
14
-
-
Production and sales staff
150
144
-
-
Total
162
158
-
0
-
0

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
4,947,509
4,434,924
-
0
-
0
Social security costs
472,580
440,748
-
-
Pension costs
145,502
137,121
-
0
-
0
5,565,591
5,012,793
-
0
-
0
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
1,048
-
0
Interest on the net defined benefit asset
11,000
25,000
Total income
12,048
25,000
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
1,048
-
GRANTHAM CAPITAL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 DECEMBER 2023
- 27 -
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
93,306
151,430
Other interest on financial liabilities
356,808
-
450,114
151,430
Other finance costs:
Interest on finance leases and hire purchase contracts
6,660
5,135
Total finance costs
456,774
156,565
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
(283,764)
(278,605)
Deferred tax
Origination and reversal of timing differences
375,695
-
0
Total tax charge/(credit)
91,931
(278,605)

The actual charge/(credit) for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
747,020
668,448
Expected tax charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
175,550
127,005
Tax effect of expenses that are not deductible in determining taxable profit
25,788
102,686
Gains not taxable
(11,750)
-
0
Unutilised tax losses carried forward
150,603
261,345
Effect of change in corporation tax rate
47
-
Permanent capital allowances in excess of depreciation
(296,468)
(491,036)
Amortisation on assets not qualifying for tax allowances
(43,770)
-
0
R&D tax credit
(283,764)
(278,605)
Deferred tax
375,695
-
0
Taxation charge/(credit)
91,931
(278,605)
GRANTHAM CAPITAL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 DECEMBER 2023
- 28 -
10
Intangible fixed assets
Group
Negative goodwill
Software
Total
£
£
£
Cost
At 31 December 2022
(931,287)
-
0
(931,287)
Additions
-
0
324,935
324,935
Transfers
-
0
1,840,262
1,840,262
At 30 December 2023
(931,287)
2,165,197
1,233,910
Amortisation and impairment
At 31 December 2022
(651,901)
-
0
(651,901)
Amortisation charged for the year
(186,257)
239,768
53,511
At 30 December 2023
(838,158)
239,768
(598,390)
Carrying amount
At 30 December 2023
(93,129)
1,925,429
1,832,300
At 30 December 2022
(279,386)
-
0
(279,386)
The company had no intangible fixed assets at 30 December 2023 or 30 December 2022.
GRANTHAM CAPITAL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 DECEMBER 2023
- 29 -
11
Tangible fixed assets
Group
Leasehold improvements
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 31 December 2022
829,551
10,196,489
712,057
6,357,529
182,102
18,277,728
Additions
223,813
5,308,816
220,913
1,119,412
332,888
7,205,842
Disposals
-
0
(117,972)
-
0
-
0
(6,875)
(124,847)
Transfers
-
0
-
0
(5,081)
(1,835,181)
-
0
(1,840,262)
At 30 December 2023
1,053,364
15,387,333
927,889
5,641,760
508,115
23,518,461
Depreciation and impairment
At 31 December 2022
469,791
7,051,606
349,594
2,611,888
77,419
10,560,298
Depreciation charged in the year
19,534
710,078
73,259
615,645
33,538
1,452,054
Eliminated in respect of disposals
-
0
(117,972)
-
0
-
0
(6,875)
(124,847)
At 30 December 2023
489,325
7,643,712
422,853
3,227,533
104,082
11,887,505
Carrying amount
At 30 December 2023
564,039
7,743,621
505,036
2,414,227
404,033
11,630,956
At 30 December 2022
359,760
3,144,883
362,463
3,745,641
104,683
7,717,430
The company had no tangible fixed assets at 30 December 2023 or 30 December 2022.
12
Investment property
Group
Company
2023
2023
£
£
Fair value
At 31 December 2022 and 30 December 2023
300,000
-
Net gains or losses through fair value adjustments
50,000
-
At 30 December 2023
350,000
-

The fair value of the investment property has been based on the directors' estimate of the fair value.

13
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
8,424,929
8,424,929
GRANTHAM CAPITAL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 DECEMBER 2023
13
Fixed asset investments
(Continued)
- 30 -
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 31 December 2022 and 30 December 2023
8,424,929
Carrying amount
At 30 December 2023
8,424,929
At 30 December 2022
8,424,929
14
Subsidiaries

Details of the company's subsidiaries at 30 December 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Vaculug Limited
England and Wales
Ordinary shares
100.00
15
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
404,923
410,527
-
-
Work in progress
659,224
798,201
-
-
Finished goods and goods for resale
5,966,087
4,187,034
-
0
-
0
7,030,234
5,395,762
-
-
16
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
10,935,201
10,737,423
-
0
-
0
Amounts owed by group undertakings
315,000
315,000
315,000
315,000
Other debtors
1,742,925
205,726
-
0
-
0
Prepayments and accrued income
1,316,943
3,553,964
-
0
-
0
14,310,069
14,812,113
315,000
315,000
GRANTHAM CAPITAL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 DECEMBER 2023
- 31 -
17
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
19
-
0
125,000
-
0
-
0
Obligations under finance leases
20
38,872
45,785
-
0
-
0
Trade creditors
8,599,553
7,871,222
-
0
-
0
Amounts owed to group undertakings
5,870,516
5,870,556
8,742,085
8,757,085
Other taxation and social security
593,447
243,538
-
-
Other creditors
5,050,557
3,698,984
2,200
2,200
Accruals and deferred income
3,839,509
4,954,036
-
0
-
0
23,992,454
22,809,121
8,744,285
8,759,285

At the balance sheet date, included in other creditors, is an amount payable to Barclays Bank Plc for invoice discounting facility of £Nil (2022: £959,092). This amount is secured by a fixed and a floating charge over the assets of the company. The bank loan relates to Coronavirus Business Interruption Loan. The loan is secured by a fixed and a floating charge over the assets of the company.

18
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
19
-
0
197,917
-
0
-
0
Obligations under finance leases
20
93,940
132,812
-
0
-
0
Other borrowings
19
10,185,688
3,083,688
-
0
-
0
10,279,628
3,414,417
-
-

Bank loan relates to Coronavirus Business Interruption Loan. This amount is secured by a fixed and a floating charge over the assets of the company.

19
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
-
0
322,917
-
0
-
0
Loans from related parties
10,185,688
3,083,688
-
0
-
0
10,185,688
3,406,605
-
-
Payable within one year
-
0
125,000
-
0
-
0
Payable after one year
10,185,688
3,281,605
-
0
-
0
GRANTHAM CAPITAL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 DECEMBER 2023
19
Loans and overdrafts
(Continued)
- 32 -

The bank loan relates to Coronavirus Business Interruption Loan of £Nil (2022: £322,917). This amount is secured by a fixed and a floating charge over the assets of the company.

 

The loans from related parties are unsecured, interest free and repayable on demand.

20
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
38,872
45,785
-
0
-
0
In two to five years
93,940
132,812
-
0
-
0
132,812
178,597
-
-

Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

21
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
2,609,709
-
Tax losses
(2,285,509)
-
Revaluations
87,500
36,005
411,700
36,005
The company has no deferred tax assets or liabilities.
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 31 December 2022
36,005
-
Charge to profit or loss
375,695
-
Liability at 30 December 2023
411,700
-
GRANTHAM CAPITAL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 DECEMBER 2023
- 33 -
22
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
145,502
137,121

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

Defined benefit schemes
The group operates a defined benefit scheme for qualifying employees. The most recent actuarial valuations of plan assets and the present value of the defined benefit obligation were carried out in March 2024 by Goddard Perry Actuarial LLP, Fellow of the Institute of Actuaries. The present value of the defined benefit obligation, the related current service cost and past service cost were measured using the projected unit credit method.
2023
2022
Key assumptions
%
%
Discount rate
4.51%
4.77%
Expected rate of increase of pensions in payment
2.06%
1.90%
Expected rate of salary increases
2.97%
2.97%
The amounts included in the balance sheet arising from the group's obligations in respect of defined benefit plans are as follows:
Company
2023
2022
£
£
Present value of defined benefit obligations
(5,637,000)
5,709,000
Fair value of plan assets
6,051,000
(5,936,000)
Surplus in scheme
(414,000)
(227,000)
Group
2023
2022

Amounts recognised in the profit and loss account

£
£
Net interest on net defined benefit liability/(asset)
(11,000)
(25,000)
GRANTHAM CAPITAL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 DECEMBER 2023
22
Retirement benefit schemes
(Continued)
- 34 -
Group
2023
2022

Amounts taken to other comprehensive income

£
£
Actual return on scheme assets
(521,000)
812,000
Less: calculated interest element
274,000
244,000
Return on scheme assets excluding interest income
(247,000)
1,056,000
Actuarial changes related to obligations
71,000
(552,000)
Total costs/(income)
(176,000)
504,000
Group
2023

Movements in the present value of defined benefit obligations

£
Liabilities at 31 December 2022
5,709,000
Benefits paid
(406,000)
Actuarial gains and losses
71,000
Interest cost
263,000
At 30 December 2023
5,637,000
Group
2023

The defined benefit obligations arise from plans funded as follows:

£
Wholly unfunded obligations
-
Wholly or partly funded obligations
5,637,000
5,637,000
Group
2023

Movements in the fair value of plan assets

£
Fair value of assets at 31 December 2022
5,936,000
Interest income
274,000
Return on plan assets (excluding amounts included in net interest)
247,000
Benefits paid
(406,000)
At 30 December 2023
6,051,000
The actual return on plan assets was £521,000 (2022: -£812,000)
GRANTHAM CAPITAL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 DECEMBER 2023
22
Retirement benefit schemes
(Continued)
- 35 -

Fair value of plan assets at the reporting period end

Group
2023
2022
£
£
Corporate bonds
5,930,000
5,818,000
Insured pensioners
121,000
118,000
23
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1
1
1
1
24
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
192,500
192,500
-
-
Between two and five years
-
64,167
-
-
192,500
256,667
-
-
25
Controlling party

Queen's Road Capital Limited (incorporated in Hong Kong) is regarded by the director as being the company's ultimate parent company.

The ultimate controlling party is Mr H S Kandhari.

26
Related party transactions
Transactions with related parties

The group has taken advantage of the exemption available in FRS 102 (s33 "Related Party Disclosure"), whereby it has not disclosed transactions with the ultimate parent company and any other wholly owned subsidiary undertaking of the group.

GRANTHAM CAPITAL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 DECEMBER 2023
26
Related party transactions
(Continued)
- 36 -

At the balance sheet date, the balance due to the director and his family was £4,677,400 (2022: £2,612,400). This balance is interest free, unsecured and not payable in the next 12 months.

 

At the balance sheet date, the balance receivable from Tyrez Limited to the group, a company under common control of director was £136,634 (2022:£Nil) in trading transactions. During the year group invoiced £163,852 in respect of services provided to Tyrez Limited.

 

At the balance sheet date, the balance payable by the group to The Oneness Group Limited a company significantly controlled by the director was £200,000 (2022: £Nil).The loan is interest free and repayable on demand.

27
Cash generated from/(absorbed by) group operations
2023
2022
£
£
Profit for the year after tax
655,089
947,053
Adjustments for:
Taxation charged/(credited)
91,931
(278,605)
Finance costs
456,774
156,565
Investment income
(12,048)
(25,000)
Loss on disposal of tangible fixed assets
28,250
-
Fair value gain on investment properties
(50,000)
-
0
Amortisation and impairment of intangible assets
53,511
(186,257)
Depreciation and impairment of tangible fixed assets
1,452,054
1,191,555
Movements in working capital:
Increase in stocks
(1,634,472)
(2,084,597)
Decrease/(increase) in debtors
502,044
(2,754,305)
Increase in creditors
1,315,246
2,486,692
Cash generated from/(absorbed by) operations
2,858,379
(546,899)
28
Cash absorbed by operations - company
2023
2022
£
£
Loss for the year after tax
(201)
(147)
Movements in working capital:
Decrease in creditors
(15,000)
-
Cash absorbed by operations
(15,201)
(147)
GRANTHAM CAPITAL LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 DECEMBER 2023
- 37 -
29
Analysis of changes in net debt - group
31 December 2022
Cash flows
30 December 2023
£
£
£
Cash at bank and in hand
976,449
1,860,688
2,837,137
Borrowings excluding overdrafts
(3,406,605)
(6,779,083)
(10,185,688)
Obligations under finance leases
(178,597)
45,785
(132,812)
(2,608,753)
(4,872,610)
(7,481,363)
30
Analysis of changes in net funds - company
31 December 2022
Cash flows
30 December 2023
£
£
£
Cash at bank and in hand
18,901
(15,201)
3,700
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