Company registration number 14699790 (England and Wales)
VRM HOLDINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
VRM HOLDINGS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Group statement of comprehensive income
9
Group balance sheet
10
Company balance sheet
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Company statement of cash flows
15
Notes to the financial statements
16 - 31
VRM HOLDINGS LIMITED
COMPANY INFORMATION
Directors
Mrs V Grimley
(Appointed 2 March 2023)
Mr R Seville
(Appointed 2 March 2023)
Mr M Whitehead
(Appointed 2 March 2023)
Company number
14699790
Registered office
Haigh Avenue
Whitehill Industrial Estate
Stockport
SK4 1NU
Auditor
Xeinadin Audit Limited
Riverside House, Kings Reach Business Park
Yew Street
Stockport
Cheshire
United Kingdom
SK4 2HD
VRM HOLDINGS LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the Period ended 31 December 2023.

 

Introduction

This Strategic Report has been prepared in accordance with the requirements of Section 414A of the Companies Act 2006. It's purpose is to assess how the directors have performed their duty to promote the success of the company and it's subsidiaries.

 

Acquisition of subsidiaries

On 20th October 2023 the company acquired the entire share capital of Seville Holdings Limited. The group's results for the period represents the period from that date to 31 December 2023. The subsidiaries trading results are for the year ended 31 December 2023.

Principal activities

The principal activity of the parent company is that of a holding company.

 

The principal activity of the subsidiary continued to be that of supplying ferrous and non-ferrous tubes, valves, fittings, flanges and allied pipeline products to second and third tier merchants, coupled with the manufacture of tubular products.

Business review

Material and shipping costs fluctuated throughout the year, impacting the supply chain and overall costs. Rising inflation rates slowed down projects and affected the market. In October, the group underwent and completed a Management Buyout (MBO). The group continues to maintain an excellent reputation within the industry while striving to grow the business and maintain historical relationships.

Health & Safety

There were no major incidents to report in the period ended 31 December 2023.

 

Key Performance Indicators

 

                2023            

                £’000            

Turnover                2,535                

Operating Profit              232            

Operating Margin         9.16%            

Liquidity ratio               1.34            

Future outlook

The outlook for 2024 remains positive, customers are optimistic that projects which had been delayed previously will move forward quickly, enabling us to sell stock more efficiently in the market. We anticipate that container prices and availability will continue to improve throughout 2024.

 

Principle risks and uncertainty

Trading in the business is influenced by the macro-economic environment in the UK. The level of activity in the residential and non-residential construction and in the residential repair, maintenance, and improvement markets in particular influence demand. Demand in these markets is sensitive to economic conditions generally including economic growth, interest rate movements, inflation, unemployment, and demographic trends.

 

Financial risk management objectives and policies

The group’s activities expose it to a number of financial risks including credit risk, cash flow risk and liquidity risk. The group adopts a prudent approach to liquidity management and to mitigate against cash flow and liquidity risk continuously monitors forecasted and actual cash flows and maintains sufficient cash reserves to meet its obligations. The group’s main exposure to credit risk is its provision of short-term credit to customers which is covered and monitored by credit insurance.

VRM HOLDINGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 2 -

On behalf of the board

Mrs V Grimley
Director
19 September 2024
VRM HOLDINGS LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 3 -

The directors present their annual report and financial statements for the Period ended 31 December 2023.

 

The company was incorporated on 2 March 2023.

Results and dividends

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

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the Period and up to the date of signature of the financial statements were as follows:

Mrs V Grimley
(Appointed 2 March 2023)
Mr R Seville
(Appointed 2 March 2023)
Mr M Whitehead
(Appointed 2 March 2023)
Auditor

The auditor, Xeinadin Audit Limited, is 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
Mrs V Grimley
Mr R Seville
Director
Director
Mr M Whitehead
Director
19 September 2024
VRM HOLDINGS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 4 -

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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are 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. They are 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.

VRM HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF VRM HOLDINGS LIMITED
- 5 -
Opinion

We have audited the financial statements of VRM Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the Period ended 31 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 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 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 directors 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 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:

VRM HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF VRM HOLDINGS 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 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:

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 parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

 

VRM HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF VRM HOLDINGS LIMITED
- 7 -

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:

 

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

 

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

 

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or 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.

Nichola Coles (FCCA) (Senior Statutory Auditor)
For and on behalf of Xeinadin Audit Limited
19 September 2024
Statutory Auditor
Riverside House, Kings Reach Business Park
Yew Street
Stockport
Cheshire
United Kingdom
SK4 2HD
VRM HOLDINGS LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 8 -
Period
ended
31 December
2023
Notes
£
Turnover
3
2,535,469
Cost of sales
(1,835,436)
Gross profit
700,033
Distribution costs
(204,443)
Administrative expenses
(319,963)
Other operating income
56,666
Operating profit
4
232,293
Interest receivable and similar income
8
127
Interest payable and similar expenses
9
(78,676)
Profit before taxation
153,744
Tax on profit
10
(67,736)
Profit for the financial Period
86,008
Profit for the financial Period is all attributable to the owners of the parent company.
VRM HOLDINGS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 9 -
Period
ended
31 December
2023
£
Profit for the Period
86,008
Other comprehensive income
Revaluation of tangible fixed assets
(112,500)
Total comprehensive income for the Period
(26,492)
Total comprehensive income for the Period is all attributable to the owners of the parent company.
VRM HOLDINGS LIMITED
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
Notes
£
£
Fixed assets
Goodwill
11
2,056,445
Tangible assets
12
1,755,699
3,812,144
Current assets
Stocks
15
3,143,377
Debtors
16
3,214,699
Cash at bank and in hand
1,054,659
7,412,735
Creditors: amounts falling due within one year
17
(5,511,538)
Net current assets
1,901,197
Total assets less current liabilities
5,713,341
Creditors: amounts falling due after more than one year
18
(5,370,293)
Provisions for liabilities
Deferred tax liability
20
369,537
(369,537)
Net liabilities
(26,489)
Capital and reserves
Called up share capital
22
3
Profit and loss reserves
(26,492)
Total equity
(26,489)
The financial statements were approved by the board of directors and authorised for issue on 19 September 2024 and are signed on its behalf by:
19 September 2024
Mrs V Grimley
Mr R Seville
Director
Director
Mr M Whitehead
Director
Company registration number 14699790 (England and Wales)
VRM HOLDINGS LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 11 -
2023
Notes
£
£
Fixed assets
Investments
13
6,232,658
Current assets
Debtors
16
58,003
Cash at bank and in hand
50
58,053
Creditors: amounts falling due within one year
17
(392,254)
Net current liabilities
(334,201)
Total assets less current liabilities
5,898,457
Creditors: amounts falling due after more than one year
18
(5,898,369)
Net assets
88
Capital and reserves
Called up share capital
22
3
Profit and loss reserves
85
Total equity
88

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £85.

The financial statements were approved by the board of directors and authorised for issue on 19 September 2024 and are signed on its behalf by:
19 September 2024
Mrs V Grimley
Mr R Seville
Director
Director
Mr M Whitehead
Director
Company registration number 14699790 (England and Wales)
VRM HOLDINGS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 12 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 2 March 2023
-
0
-
0
-
0
-
Period ended 31 December 2023:
Profit for the period
-
-
86,008
86,008
Other comprehensive income:
Revaluation of tangible fixed assets
-
(112,500)
-
(112,500)
Total comprehensive income
-
(112,500)
86,008
(26,492)
Issue of share capital
22
3
-
-
3
Transfers
-
112,500
(112,500)
-
Balance at 31 December 2023
3
-
0
(26,492)
(26,489)
VRM HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 13 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 2 March 2023
-
0
-
0
-
Period ended 31 December 2023:
Profit and total comprehensive income
-
85
85
Issue of share capital
22
3
-
3
Balance at 31 December 2023
3
85
88
VRM HOLDINGS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 14 -
2023
Notes
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
26
294,121
Interest paid
(78,676)
Net cash inflow/(outflow) from operating activities
215,445
Investing activities
Purchase of subsidiaries, net of cash acquired
(5,178,049)
Interest received
127
Net cash used in investing activities
(5,177,922)
Financing activities
Proceeds from borrowings
2,500,000
Proceeds from new bank loans
3,517,136
Net cash generated from/(used in) financing activities
6,017,136
Net increase in cash and cash equivalents
1,054,659
Cash and cash equivalents at beginning of Period
-
0
Cash and cash equivalents at end of Period
1,054,659
VRM HOLDINGS LIMITED
COMPANY STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 15 -
2023
Notes
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
27
2,133,125
Interest paid
(49,245)
Net cash inflow/(outflow) from operating activities
2,083,880
Investing activities
Purchase of subsidiaries
(6,232,658)
Dividends received
58,000
Net cash used in investing activities
(6,174,658)
Financing activities
Proceeds from borrowings
2,500,000
Proceeds from new bank loans
1,590,828
Net cash generated from/(used in) financing activities
4,090,828
Net increase in cash and cash equivalents
50
Cash and cash equivalents at beginning of Period
-
0
Cash and cash equivalents at end of Period
50
VRM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 16 -
1
Accounting policies
Company information

VRM Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Haigh Avenue, Whitehill Industrial Estate, Stockport, SK4 1NU.

 

The group consists of VRM Holdings Limited and all of its subsidiaries.

1.1
Reporting period

The company was incorporated on 2 March 2023, therefore the financial statements are drawn up for a period shorter than one year.

1.2
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 leasehold land and buildings. The principal accounting policies adopted are set out below.

 

No profit and loss account is presented for VRM Holdings Limited as permitted by section 408 of the Companies Act 2006.

1.3
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.

1.4
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company VRM Holdings 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 31 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.

VRM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -

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

 

Boole's Tools & Pipe Fittings Limited & Seville Holdings Limited have been included in the group financial statements using the purchase method of accounting. Accordingly, the group profit and loss account statement and statement of cash flows include the results and cash flows from the subsidiaries for the period from its acquisition on 20th October 2023. The purchase consideration has been allocated to the assets and liabilities on the basis of fair value at the date of acquisition.

1.5
Going concern

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

1.6
Turnover

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

 

The company recognises revenue when:

The amount of revenue can be reliably measured;

it is probable that future economic benefits will flow to the entity;

and specific criteria have been met for each of the company's activities.

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 10 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.

1.8
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 land and buildings
50 years
Plant and equipment
7 - 10 years
Fixtures and fittings
7 - 10 years
Motor vehicles
7 - 10 years

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.

VRM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -

Revaluations of tangible fixed assets

 

Leasehold land and buildings are carried at fair value, plus subsequent additions less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the balance sheet date.

 

Fair value is determined from market based evidence normally undertaken by professionally qualified surveyors. The fair value of the land and buildings is usually considered to be their market value.

 

Revaluation gains and losses are recognised in other comprehensive income and accumulated in equity, except to the extent that a revaluation gain reverses a revaluation loss previously recognised in profit or loss or a revaluation loss exceeds the accumulated revaluation gains recognised in equity; such gains and loss are recognised in profit or loss.

 

1.9
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.

1.10
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.

1.11
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.

 

Stock is valued on the AVCO (Average Cost) basis. Each time stock is acquired a new weighted average cost is calculated.

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.

VRM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
1.12
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.

1.13
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.

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.

1.14
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.

VRM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
1.15
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.

1.16
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.

1.17
Retirement benefits

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

1.18
Leases

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.

1.19

Borrowings

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

 

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

 

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

VRM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 21 -
2
Judgements and key sources of estimation uncertainty

In the application of the group’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.

3
Turnover and other revenue
2023
£
Turnover analysed by geographical market
UK
2,535,469
2023
£
Other revenue
Interest income
127
Release of other provision
56,666

Turnover and profit on ordinary activities before taxation relate to the principal activity of the company, and arise wholly within the UK.

4
Operating profit
2023
£
Operating profit for the period is stated after charging/(crediting):
Release of other provision
(56,666)
Fees payable to the group's auditor for the audit of the group's financial statements
4,620
Depreciation of owned tangible fixed assets
26,973
Amortisation of intangible assets
34,855
Operating lease charges
11,305
5
Auditor's remuneration
2023
Fees payable to the company's auditor and associates:
£
For audit services
Audit of the financial statements of the group and company
4,620
Audit of the financial statements of the company's subsidiaries
21,963
26,583
For other services
All other non-audit services
19,571
VRM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
5
Auditor's remuneration
(Continued)
- 22 -
6
Employees

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

Group
Company
2023
2023
Number
Number
Employees & Directors
41
3

Their aggregate remuneration comprised:

Group
Company
2023
2023
£
£
Wages and salaries
161,250
-
0
Social security costs
23,068
-
Pension costs
4,987
-
0
189,305
-
0
7
Directors' remuneration
2023
£

As total directors' remuneration was less than £200,000 in the current Period, no disclosure is provided for this Period.

8
Interest receivable and similar income
2023
£
Interest income
Other interest income
127
9
Interest payable and similar expenses
2023
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
52,409
Other interest on financial liabilities
26,267
78,676
VRM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 23 -
10
Taxation
2023
£
Current tax
UK corporation tax on profits for the current period
67,574
Deferred tax
Origination and reversal of timing differences
162
Total tax charge
67,736

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

2023
£
Profit before taxation
153,744
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52%
36,161
Group relief
(16,911)
Permanent capital allowances in excess of depreciation
483
Other permanent differences
7,479
Pre-acquisition profits not chargeable to the group
39,713
Deferred tax
811
Taxation charge
67,736
11
Intangible fixed assets
Group
Goodwill
£
Cost
At 2 March 2023
-
0
Additions
2,091,300
At 31 December 2023
2,091,300
Amortisation and impairment
At 2 March 2023
-
0
Amortisation charged for the Period
34,855
At 31 December 2023
34,855
Carrying amount
At 31 December 2023
2,056,445
The company had no intangible fixed assets as at 31st December 2023.
VRM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
11
Intangible fixed assets
(Continued)
- 24 -
12
Tangible fixed assets
Group
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 2 March 2023
-
-
-
-
-
Business combinations
1,425,000
377,969
188,686
1,070,311
3,061,966
At 31 December 2023
1,425,000
377,969
188,686
1,070,311
3,061,966
Depreciation and impairment
At 2 March 2023
-
-
-
-
-
Depreciation charged in the Period
2,461
1,612
2,371
20,529
26,973
Business combinations
11,789
306,821
131,723
711,518
1,150,062
At 31 December 2023
14,250
316,157
145,456
830,404
1,306,267
Carrying amount
At 31 December 2023
1,410,750
61,812
43,230
239,907
1,755,699
The company had no tangible fixed assets at 31 December 2023.
13
Fixed asset investments
Group
Company
2023
2023
Notes
£
£
Investments in subsidiaries
14
-
0
6,232,658
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 2 March 2023
-
Additions
6,232,658
At 31 December 2023
6,232,658
Carrying amount
At 31 December 2023
6,232,658
VRM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 25 -
14
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Address
Class of
% Held
shares held
Direct
Boole's Tools & Pipe Fittings Limited
1
Ordinary
100.00
Seville Holdings Limited
2
Ordinary
100.00

Registered office addresses (all UK unless otherwise indicated):

1
Haigh Avenue, Whitehall Industrial Estate, Reddish, Stockport, Cheshire, UK, SK4 1NU
2
As above

The principal activity of Boole's Tools & Pipe Fittings Limited is that of supplying ferrous and non-ferrous tubes, valves, fittings, flanges and allied pipeline products to second and third tier merchants, coupled with the manufacture of tubular products.

 

The principal activity of Seville Holdings Limited is that of an intermediate holding company.

15
Stocks
Group
Company
2023
2023
£
£
Finished goods and goods for resale
3,143,377
-
0
16
Debtors
Group
Company
2023
2023
Amounts falling due within one year:
£
£
Trade debtors
3,176,816
-
0
Other debtors
2,103
-
0
Prepayments and accrued income
35,777
-
0
3,214,696
-
Amounts falling due after more than one year:
Unpaid share capital
3
3
Amounts owed by group undertakings
-
58,000
3
58,003
Total debtors
3,214,699
58,003
VRM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 26 -
17
Creditors: amounts falling due within one year
Group
Company
2023
2023
Notes
£
£
Bank loans
19
598,558
365,987
Trade creditors
1,857,583
-
0
Corporation tax payable
137,799
-
0
Other taxation and social security
245,459
-
Other creditors
2,424,735
-
0
Accruals and deferred income
247,404
26,267
5,511,538
392,254

Included within other creditors is an invoice discounting facility amounting to £2,418,442 (2022: £852,801). As part of the security for the facility there is a fixed and floating charge over all the property and undertakings of the company.

 

Amounts owing under asset finance are secured against the related asset.

18
Creditors: amounts falling due after more than one year
Group
Company
2023
2023
Notes
£
£
Bank loans and overdrafts
19
2,870,293
1,224,841
Other borrowings
19
2,500,000
2,500,000
Amounts owed to group undertakings
-
0
2,173,528
5,370,293
5,898,369
19
Loans and overdrafts
Group
Company
2023
2023
£
£
Bank loans
3,468,851
1,590,828
Other loans
2,500,000
2,500,000
5,968,851
4,090,828
Payable within one year
598,558
365,987
Payable after one year
5,370,293
3,724,841
VRM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
19
Loans and overdrafts
(Continued)
- 27 -

Bank loans

 

On 20 October 2023 the group drew down on three HSBC facility agreements with the following terms:

 

Recovery loan scheme

 

Repayment terms: 71 monthly payments

 

Interest: 4.45% per annum over the Bank of England base rate.

 

Secured by the way of: Debenture from VRM Holdings Limited.

 

Term Loan

 

Repayment terms: 60 monthly payments

 

Interest: 7.06% per annum on a fixed basis.

 

Secured by the way of: Debenture from VRM Holdings Limited.

 

Term Loan

 

Repayment terms: 48 monthly payments.

 

Interest: 3.5% per annum over the Bank of England base rate.

 

Secured by the way of: Debenture from VRM Holdings Limited.

 

The long term loans are secured by the fixed and floating charge over the freehold and leasehold property known as Boole's Tools and Pipe Fittings, Haigh Avenue, Stockport, SK4 1NU or undertaking of the company.

 

Amounts owing under asset finance are secured against the related asset.

20
Deferred taxation

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

Liabilities
2023
Group
£
Accelerated capital allowances
124,811
Investment property
244,726
369,537
The company has no deferred tax assets or liabilities.
VRM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
20
Deferred taxation
(Continued)
- 28 -
Group
Company
2023
2023
Movements in the Period:
£
£
Asset at 2 March 2023
-
-
Charge to profit or loss
811
-
Other
368,726
-
Liability at 31 December 2023
369,537
-

 

In the Spring Budget 2021, the Government announced that from 1 April 2023 the corporation tax rate would increase to 25%. This new law was substantively enacted on 24 May 2021. Deferred tax balances have been remeasured to either 19% or 25% depending on when the Directors expect these timing differences to reverse. The impact of the change in tax rate has been recognised in tax expense in profit or loss, except to the extent that it relates to items previously recognised outside profit or loss.

21
Retirement benefit schemes
2023
Defined contribution schemes
£
Charge to profit or loss in respect of defined contribution schemes
4,987

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.

22
Share capital
Group and company
2023
2023
Ordinary share capital
Number
£
Issued and not fully paid
Ordinary shares of 1p each
300
3

300 Ordinary shares of £0.01 per share were issued during the period. All 300 shares remained unpaid as at the period end.

VRM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 29 -
23
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
2023
£
£
Within one year
70,572
-
Between two and five years
92,758
-
163,330
-
24
Related party transactions

Summary of transactions with related parties

 

Company

 

Summary of transactions with subsidiaries

 

At the balance sheet date, the amount owed to Boole's Tools & Pipe Fittings Limited was £2,173,528. This amount is interest free and repayable in one year and one day on a rolling basis.

 

At the balance sheet date, the amount owed to Seville Holdings Limited was £58,000. This amount is interest free and repayable in one year and one day on a rolling basis.

 

Group

 

Summary of transactions with other related parties

 

Consultancy fees of £16,000 were paid to related parties during the year.

25
Controlling party

At the balance sheet date, in the opinion of the directors there is no ultimate controlling party as no

shareholder holds an overall majority.

VRM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 30 -
26
Cash generated from/(absorbed by) group operations
2023
£
Profit for the Period after tax
86,008
Adjustments for:
Taxation charged
67,736
Finance costs
78,676
Investment income
(127)
Amortisation and impairment of intangible assets
34,855
Depreciation and impairment of tangible fixed assets
26,973
Cash generated from/(absorbed by) operations
294,121
27
Cash generated from/(absorbed by) operations - company
2023
£
Profit for the Period after tax
85
Adjustments for:
Finance costs
49,245
Investment income
(58,000)
Movements in working capital:
Increase in debtors
(58,000)
Increase in creditors
2,199,795
Cash generated from/(absorbed by) operations
2,133,125
28
Analysis of changes in net debt - group
2 March 2023
Cash flows
Acquisitions and disposals
31 December 2023
£
£
£
£
Cash at bank and in hand
-
6,232,708
(5,178,049)
1,054,659
Borrowings excluding overdrafts
-
(7,846,874)
1,878,023
(5,968,851)
-
(1,614,166)
(3,300,026)
(4,914,192)
VRM HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2023
- 31 -
29
Analysis of changes in net debt - company
2 March 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
-
50
50
Borrowings excluding overdrafts
-
(4,090,828)
(4,090,828)
-
(4,090,778)
(4,090,778)
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