Registration number:
Graham Engineering Limited
for the Period from 1 September 2023 to 30 August 2024
Graham Engineering Limited
Contents
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Company Information |
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Chairman's Overview |
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Strategic Report |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Profit and Loss Account |
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Statement of Comprehensive Income |
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Balance Sheet |
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Statement of Changes in Equity |
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Statement of Cash Flows |
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Notes to the Financial Statements |
Graham Engineering Limited
Company Information
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Directors |
Mrs S Davall Mr T Eckford Mr S Fraser Mr J Haran Mr F Kelly |
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Registered office |
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Auditors |
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Graham Engineering Limited
Chairman's Overview for the Period from 1 September 2023 to 30 August 2024
The period has continued to be challenging with our order book still at a lower level although now increasing to pre-covid levels. There has been a reduction in demand from Sellafield, however we are now beginning to see significant growth from them both in their direct award contract and the new HISSCII contract.
Noting the revised trading position, we have reduced the headcount to match. In respect of this revision, we have achieved a result significantly better than breakeven with a much brighter horizon in respect of both secured orders and tendering prospects giving an increased trading profile for next year. This includes Siemens who have awarded us a 5 year extension to our existing contract and also a contract award from NRS for the Hunterston Box contract, this is alongside the placement for an extended delivery of slotted cans for Sellafield and an anticipated new order from Rapiscan.
Tony Eckford
Chairman
Graham Engineering Limited
Strategic Report for the Period from 1 September 2023 to 30 August 2024
The directors present their strategic report for the period from 1 September 2023 to 30 August 2024.
Principal activity
The principal activities of the company are those of precision stainless steel fabricators, deep drawn press work, 5 axis machining, laser cutting, laser engraving and 5 axis welding, all to high quality standards supported by our in-house detail drawings office.
Fair review of the business
Once again, we have a number of wider factors beyond operations affecting the results for the period. The continuing process of the sale of the company has remained dominant and has resulted in further exceptional costs of £138k affecting performance. There are also wider matters related to the sale which have inherently caused a drag on the result that aren’t quantified here.
The process of the company sale is continuing but we are now expecting a completion before the end of the fourth quarter 2024/25 where we will see a more stable and focused ‘drive’ going forward. The increases seen last year in the costs of employment have continued and have also impacted our insurance costs. Overall, in order to retain the core skills and competences needed for the 167 headcount, a small increase in numbers from last year, we have seen a 6.71% increase in our wage costs. The utility costs of the business too have increased by 52.51% from 2023.
At £14,978,717 we have seen marginal growth of 5.74% in turnover from last year with sales to Sellafield down by 4.87% now making up only 37.91% of total turnover. Better performance has been seen with the security scanners for Rapiscan as their market recovers with growth of 193.56%, similarly with the consumables for Rolls Royce with a pick up back to more normal levels reflecting growth of 65.78%. We have also seen the first element of growth through Magnox/NRS on box manufacture with that contract and another ancillary item adding over £1m to the top line.
Profit is at £276k pre-tax which is a marked improvement on 2022/23 and with the ten-year HISSCII contract with Sellafield signed in November 2023 we can see growth in turnover and profit continuing forward as we get the new production lines established.
Our targets to develop manufacturing solutions for new products have continued and we have made some progress in the defence sector with a new customer but this remains at a nominal level and with current tendering and work won, we see ourselves being challenged again to keep our dependence on one particular customer in the nuclear sector to below the 50% level.
Business capital investment continued at £450k spend on machining, press and laser capabilities with some disposals of handling equipment and old robotics at £103k.
In July 2024 we achieved the accreditation to the AS9100 standard that should allow us to expand our footprint in the aerospace and defence markets. Our developments continue in the cyber security environment with Cyber Essentials Plus still under way and List X our next target.
We continue to operate under ISO9001, ISO14001 and ISO45001(2018) and we achieved commended in the Manufacturing Industry Sector of the ROSPA awards 2024.
Graham Engineering Limited
Strategic Report for the Period from 1 September 2023 to 30 August 2024
Key performance indicators (KPI's)
The company's key financial and other performance indicators during the period were as follows:
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(As restated) |
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Period ended |
30 August 2024 |
31 August 2023 |
31 August 2022 |
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Turnover |
£14,978,717 |
£14,165,481 |
£16,434,983 |
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Turnover growth |
5.74% |
(13.81)% |
(10.76)% |
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Gross profit margin |
19.04% |
14.30% |
15.53% |
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Profit before tax |
£275,926 |
£5,429 |
£542,457 |
Principal risks and uncertainties
There are as always a number of risks and uncertainties which could have an impact on the company’s performance, both in the forthcoming year and in the longer term.
Risk management is an intrinsic part of this business to ensure that we manage the needs of stakeholders and that strategic objectives are met.
As uncertainty regarding global markets prevails with America's new approach, the continuing war in Europe and unresolved matters in the Middle East and now Asia our essentially UK based sales are generally protected. There are some wider potential risks for our customers in health and security in their respective international markets but neither customer perceives any problem at this time. Our suppliers again are basically UK based and may see some impacts with tariffs but we are not aware of anything of any significance in this area. We believe the company can reasonably be expected to continue in operation and meet its liabilities for the foreseeable future. Whilst we cannot predict with any certainty the duration or extent of these international events we believe we are actively managing the risks to our resources, assets, relationships and our staff on an ongoing basis.
Once the company sale process has completed a number of matters regarding balance sheet amounts and management focus should resolve themselves in the immediate future.
The core of our market remains in the UK nuclear sector and as such our industry is not as susceptible to the economic climate as other companies. Our main product is intrinsic in the protection of the environment and demand is very much determined by our customers processing abilities. We remain competitive in this area through high quality skills and flexibility.
The company’s operations are exposed to a variety of financial risks that include the effects of changes to customer credit risk and supply chain risk. The company has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the company.
Policies are in place to limit the exposure to excess stock being carried forward from one period to the next. The company has no significant concentrations of credit risk. Receivable balances are monitored on an ongoing basis to ensure the company’s bad debt exposure is not significant.
Approved and authorised by the
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Graham Engineering Limited
Directors' Report for the Period from 1 September 2023 to 30 August 2024
The directors present their report and the financial statements for the period from 1 September 2023 to 30 August 2024.
Directors of the company
The directors who held office during the period were as follows:
Results
The results for the company are set out in the financial statements.
Dividends
Dividends totalling £Nil (2023 - £500,000) were paid during the period.
Future developments
As part of our business development model we are continually looking for new markets. We are working with a number of potential opportunities in both aerospace and defence and we continue to develop our internal information systems security to support further work in both development and production in these sectors. We are bidding for and winning work from existing and new nuclear customers and await further release of box manufacture type contracts from the nuclear market. As emerging energy solutions develop, we look to enter those supply chains early in order to add our capabilities and see future significant growth outside of our current offering.
Research and development
The company will continue its policy of investment in research and development in order to retain a competitive position in the market.
Risk policies
As required by schedule 7.6(1)(a) and 7.6(1)(b) of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 the following information required to be disclosed in the directors report has been disclosed in the Strategic Report on page 3:
• an indication of financial risk management objectives and policies:
• an indication of the different risks the company is exposed to.
Disclosure of information to the auditors
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.
Approved and authorised by the
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Graham Engineering Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
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select suitable accounting policies and apply them consistently; |
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make judgements and accounting estimates that are reasonable and prudent; |
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state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Graham Engineering Limited
Independent Auditor's Report to the Members of Graham Engineering Limited
Opinion
We have audited the financial statements of Graham Engineering Limited (the 'company') for the period from 1 September 2023 to 30 August 2024, which comprise the Profit and Loss Account, Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• | give a true and fair view of the state of the company's affairs as at 30 August 2024 and of its profit for the period then ended; |
• | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
• | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the 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 company's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were 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 directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Graham Engineering Limited
Independent Auditor's Report to the Members of Graham Engineering Limited
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
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the information given in the Strategic Report and Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and |
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the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
• | the financial statements are not in agreement with the accounting records and returns; or |
• | certain disclosures of directors' remuneration specified by law are not made; or |
• | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities [set out on page 6], the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor 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. Based on our understanding of the company and the nature of the industry, we identified that the principal risks of non-compliance with laws and regulations related to UK tax legislation, employment regulations, health and safety regulations, anti-bribery, corruption and fraud, money laundering and we considered the extent to which non-compliance might have a material effect on the financial statements. We also identified financial reporting standards and the Companies Act 2006 as having a direct impact on the preparation of financial statements.
Our audit procedures were designed to respond to those identified risks, including non-compliance with laws and regulations (irregularities) and fraud that are material to the financial statements. Our audit procedures included but are not limited to:
Graham Engineering Limited
Independent Auditor's Report to the Members of Graham Engineering Limited
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Discussing with the directors and management their policies, procedures and related controls regarding compliance with laws and regulations and if there are any known instances with non-compliance; |
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Communicating identified laws and regulations throughout our engagement team and remaining alert to any indications of non-compliance throughout our audit; |
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Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud; |
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Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud; |
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Gaining an understanding of the internal controls established to mitigate risks related to fraud; |
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Discussing amongst the engagement team the risks of fraud; and |
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Addressing the risks of fraud through management override of controls by performing journal entry testing. |
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our 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.
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For and on behalf of
The Wharf
Manchester Road
Burnley
Lancashire
BB11 1JG
Graham Engineering Limited
Profit and Loss Account for the Period from 1 September 2023 to 30 August 2024
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Note |
2024 |
2023 |
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Turnover |
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Cost of sales |
( |
( |
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Gross profit |
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Distribution costs |
( |
( |
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Administrative expenses |
( |
( |
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Other operating income |
( |
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Operating profit |
291,877 |
28,190 |
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Other interest receivable and similar income |
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Interest payable and similar expenses |
( |
( |
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Profit before tax |
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|
|
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Tax on profit |
( |
( |
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Profit/(loss) for the financial period |
|
( |
The above results were derived from continuing operations.
Graham Engineering Limited
Statement of Comprehensive Income for the Period from 1 September 2023 to 30 August 2024
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2024 |
2023 |
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Profit/(loss) for the period |
|
( |
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Movement in deferred tax on property revaluation |
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|
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Total comprehensive income for the period |
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( |
Graham Engineering Limited
(Registration number: 01329239)
Balance Sheet as at 30 August 2024
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Note |
2024 |
2023 |
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Fixed assets |
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Tangible assets |
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Current assets |
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Stocks |
2,055,948 |
1,493,679 |
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Debtors |
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Cash at bank and in hand |
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Creditors: Amounts falling due within one year |
( |
( |
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Net current assets |
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Total assets less current liabilities |
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Creditors: Amounts falling due after more than one year |
( |
( |
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Provisions for liabilities |
( |
( |
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Net assets |
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Capital and reserves |
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Called up share capital |
100,000 |
100,000 |
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Revaluation reserve |
1,713,408 |
1,729,040 |
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Retained earnings |
10,434,366 |
10,258,832 |
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Shareholders' funds |
12,247,774 |
12,087,872 |
Approved and authorised by the
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Graham Engineering Limited
Statement of Changes in Equity for the Period from 1 September 2023 to 30 August 2024
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Share capital |
Revaluation reserve |
Retained earnings |
Total |
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At 1 September 2023 |
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Profit for the period |
- |
- |
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Other comprehensive income |
- |
( |
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Total comprehensive income |
- |
( |
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At 30 August 2024 |
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Share capital |
Revaluation reserve |
Retained earnings |
Total |
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At 1 September 2022 |
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Loss for the period |
- |
- |
( |
( |
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Other comprehensive income |
- |
( |
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Total comprehensive income |
- |
( |
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( |
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Dividends |
- |
- |
( |
( |
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At 31 August 2023 |
100,000 |
1,729,040 |
10,258,832 |
12,087,872 |
Graham Engineering Limited
Statement of Cash Flows for the Period from 1 September 2023 to 30 August 2024
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Note |
2024 |
2023 |
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Cash flows from operating activities |
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Profit/(loss) for the period |
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( |
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Adjustments to cash flows from non-cash items |
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Depreciation and amortisation |
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Loss on disposal of tangible assets |
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Finance income |
( |
( |
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Finance costs |
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Corporation tax expense |
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Working capital adjustments |
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Increase in stocks |
( |
( |
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Increase in trade debtors |
( |
( |
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(Decrease)/increase in trade creditors |
( |
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Cash generated from operations |
( |
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Corporation taxes (paid)/received |
( |
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Net cash flow from operating activities |
( |
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Cash flows from investing activities |
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Interest received |
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Acquisitions of tangible assets |
( |
( |
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Proceeds from sale of tangible assets |
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Net cash flows from investing activities |
( |
( |
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Cash flows from financing activities |
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Interest paid |
( |
( |
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Repayment of bank borrowing |
- |
( |
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Repayment of other borrowing |
- |
( |
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Payments to finance lease creditors |
( |
( |
|
|
Dividends paid |
- |
( |
|
|
Net cash flows from financing activities |
( |
( |
|
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Net decrease in cash and cash equivalents |
( |
( |
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Cash and cash equivalents at 1 September |
|
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Cash and cash equivalents at 30 August |
669,974 |
1,887,508 |
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Graham Engineering Limited
Notes to the Financial Statements for the Period from 1 September 2023 to 30 August 2024
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General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
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Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006.
Basis of preparation
These financial statements have been prepared on a going concern basis using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.
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 £.
Going concern
The financial statements have been prepared on a going concern basis.
Revenue recognition
Turnover represents amounts chargeable, net of value added tax, in respect of the sale of goods to customers. Turnover is recognised when goods are invoiced, which corresponds to their delivery to customers. Payments on account on long-term contracts or in advance of work undertaken are excluded from turnover within the year and shown within stocks on the balance sheet. When contract obligations are met and profitability is assured these are then released to turnover.
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. When a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
Graham Engineering Limited
Notes to the Financial Statements for the Period from 1 September 2023 to 30 August 2024
Corporation tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.
Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the Company. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.
Tangible assets
Tangible assets are stated at cost or valuation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land over their estimated useful lives, as follows:
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Asset class |
Depreciation method and rate |
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Freehold property |
2% per annum on cost or valuation |
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Motor vehicles |
25% per annum on cost |
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Plant and machinery |
10% per annum on reducing balance basis |
Trade debtors
Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.
Stocks
Stocks of raw materials and consumables are valued at the lower of cost and net realisable value.
Work in progress is valued on the basis of cost plus an appropriate portion of fixed and variable overheads based on normal levels of activity. Profit on individual contracts is only taken at an appropriate stage in the contract when the margins earned to date and the proportion of that prudently forecast at completion can be reasonably ascertained. Profit on major contracts is taken only at 50% completion stage in the contract. Provision is made for any foreseeable losses, where appropriate, taking a prudent view of future non-recoverable costs. Profit for the period includes the benefit of claims for recovery of additional costs incurred on contracts completed in prior years.
Graham Engineering Limited
Notes to the Financial Statements for the Period from 1 September 2023 to 30 August 2024
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price.
Borrowings
Loans and borrowings are initially recognised at the transaction price including transaction costs. Subsequently they are measured at amortised cost using the effective interest rate method. If an arrangement constitutes a finance transaction it is measured at present value.
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit and loss on a straight-line basis over the period of the lease.
Finance leases giving rights approximating to ownership are capitalised and depreciated over the expected life of the asset. Lease payments are apportioned between the finance charges and the reduction of the outstanding lease liability using the effective interest method.
Assets acquired under hire purchase agreements are capitalised and depreciated over the expected life of the asset. Hire purchase payments are apportioned between the finance charges and the reduction of the outstanding hire purchase liability using the effective interest method.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Dividends
Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
Financial instruments
Graham Engineering Limited
Notes to the Financial Statements for the Period from 1 September 2023 to 30 August 2024
|
Judgements and key sources of estimation uncertainty |
Judgements
In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilites 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 periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Revenue recognition
Individual contracts can be long term in nature. An assessment is made of the stage of completion at a period end, requiring an element of judgement. These judgements are regularly reviewed to reflect the changing environment.
Profit recognition
Individual contracts can be long term in nature. An assessment is made of the profit on individual contracts at a period end, requiring an element of judgement. These judgements are regularly reviewed to reflect the changing environment.
Depreciation
The depreciation expense is the recognition of the decline in the value of the asset and allocation of the cost of the asset over the periods in which the asset will be used. Judgements are made as to the estimated useful life of the assets. These judgements are regularly reviewed to reflect the changing environment.
Impairment of fixed assets
The company assesses the impairment of tangible fixed assets and intangible assets subject to depreciation whenever events or changes in circumstances indicate that the carrying value may not be recoverable. These judgments are regularly reviewed to reflect the changing environment.
|
Turnover |
The analysis of the company's turnover for the period from continuing operations is as follows:
|
2024 |
2023 |
|
|
Sale of goods and long-term contract income |
|
|
|
Other operating income |
The analysis of the company's other operating income for the period is as follows:
|
2024 |
2023 |
|
|
Miscellaneous other operating income |
( |
|
Graham Engineering Limited
Notes to the Financial Statements for the Period from 1 September 2023 to 30 August 2024
|
Operating profit |
Arrived at after charging/(crediting)
|
2024 |
2023 |
|
|
Depreciation expense |
|
|
|
Operating lease expense - plant and machinery |
|
|
|
Loss on disposal of plant and machinery |
|
|
|
Exceptional administrative expenses |
137,917 |
- |
|
Interest receivable and similar income |
|
2024 |
2023 |
|
|
Interest income on bank deposits |
|
|
|
Other finance income |
|
|
|
|
|
|
Interest payable and similar expenses |
|
2024 |
2023 |
|
|
Interest on bank overdrafts and borrowings |
- |
|
|
Interest on obligations under finance leases and hire purchase contracts |
|
|
|
|
|
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
|
2024 |
2023 |
|
|
Wages and salaries |
|
|
|
Social security costs |
|
|
|
Pension costs, defined contribution scheme |
|
|
|
|
|
The average number of persons employed by the company (including directors) during the period, analysed by category was as follows:
|
2024 |
2023 |
|
|
Production |
|
|
|
Administration and support |
|
|
|
|
|
Graham Engineering Limited
Notes to the Financial Statements for the Period from 1 September 2023 to 30 August 2024
|
Directors' remuneration |
The directors' remuneration for the period was as follows:
|
2024 |
2023 |
|
|
Remuneration |
|
|
|
Contributions paid to money purchase schemes |
|
|
|
414,515 |
409,499 |
During the period the number of directors who were receiving benefits and share incentives was as follows:
|
2024 |
2023 |
|
|
Share options |
|
|
|
Accruing benefits under money purchase pension schemes |
|
|
In respect of the highest paid director:
|
2024 |
2023 |
|
|
Remuneration |
|
|
|
Company contributions to money purchase pension schemes |
|
|
|
Auditors' remuneration |
|
2024 |
2023 |
|
|
Audit of the financial statements |
|
|
|
Other fees to auditors |
||
|
All other services |
|
|
Graham Engineering Limited
Notes to the Financial Statements for the Period from 1 September 2023 to 30 August 2024
|
Taxation |
Tax charged/(credited) in the profit and loss account
|
2024 |
2023 |
|
|
Current taxation |
||
|
UK corporation tax |
|
|
|
Deferred taxation |
||
|
Arising from origination and reversal of timing differences |
|
( |
|
Tax on profit |
|
|
The tax on profit before tax for the period is higher than the standard rate of corporation tax in the UK (2023 - higher than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
|
2024 |
2023 |
|
|
Profit before tax |
|
|
|
Corporation tax at standard rate |
|
|
|
Effect of expense not deductible in determining taxable profit |
|
|
|
Decrease from effect of tax incentives |
- |
( |
|
Tax increase from effect of capital allowances and depreciation |
|
|
|
Tax decrease from changes in tax legislation |
- |
( |
|
Total tax charge |
|
|
Deferred tax
Deferred tax liabilities
|
2024 |
Asset |
Liability |
|
Difference between accumulated depreciation and capital allowances |
- |
|
|
Deferred tax on property revaluation |
- |
|
|
- |
|
|
2023 |
Asset |
Liability |
|
Difference between accumulated depreciation and capital allowances |
- |
|
|
Deferred tax on property revaluation |
- |
|
|
- |
|
Graham Engineering Limited
Notes to the Financial Statements for the Period from 1 September 2023 to 30 August 2024
|
Tangible assets |
|
Land and buildings |
Motor vehicles |
Plant and machinery |
Total |
|
|
Cost or valuation |
||||
|
At 1 September 2023 |
|
|
|
|
|
Additions |
- |
- |
|
|
|
Disposals |
- |
- |
( |
( |
|
At 30 August 2024 |
|
|
|
|
|
Depreciation |
||||
|
At 1 September 2023 |
|
|
|
|
|
Charge for the period |
|
|
|
|
|
Eliminated on disposal |
- |
- |
( |
( |
|
At 30 August 2024 |
|
|
|
|
|
Carrying amount |
||||
|
At 30 August 2024 |
|
|
|
|
|
At 31 August 2023 |
|
|
|
|
Included within the net book value of land and buildings above is £3,723,756 (2023 - £3,791,345) in respect of freehold land and buildings.
Revaluation
The fair value of the company's freehold land and buildings was revalued on
Assets held under finance leases and hire purchase contracts
The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:
|
2024 |
2023 |
|
|
Plant and machinery |
1,332,124 |
1,469,139 |
|
Motor vehicles |
- |
7,838 |
|
1,332,124 |
1,476,977 |
Graham Engineering Limited
Notes to the Financial Statements for the Period from 1 September 2023 to 30 August 2024
|
Stocks |
|
2024 |
2023 |
|
|
Raw materials and consumables |
|
|
|
Work in progress |
|
|
|
Long-term contracts - payments on account |
- |
( |
|
2,055,948 |
1,493,679 |
|
Debtors |
|
2024 |
2023 |
|
|
Trade debtors |
|
|
|
Other debtors |
|
|
|
Prepayments |
|
|
|
Corporation tax recoverable |
|
|
|
|
|
|
Creditors |
|
Note |
2024 |
2023 |
|
|
Due within one year |
|||
|
Loans and borrowings |
|
|
|
|
Trade creditors |
|
|
|
|
Social security and other taxes |
|
|
|
|
Outstanding defined contribution pension costs |
|
|
|
|
Accruals |
|
|
|
|
Corporation tax liability |
224,048 |
92,409 |
|
|
Dividends payable |
- |
|
|
|
|
|
||
|
Due after one year |
|||
|
Loans and borrowings |
|
|
Graham Engineering Limited
Notes to the Financial Statements for the Period from 1 September 2023 to 30 August 2024
|
Provisions for liabilities |
|
Deferred tax |
Total |
|
|
At 1 September 2023 |
|
|
|
Decrease arising from origination and reversal of timing differences |
|
|
|
Decrease in deferred tax on property revaluation |
( |
( |
|
At 30 August 2024 |
|
|
|
|
||
The deferred tax liability includes a provision for deferred tax on the gain on the revaluation of the company's freehold land and buildings.
|
Pension and other schemes |
Defined contribution pension scheme
The company operates a defined contribution pension scheme. The pension cost charge for the period represents contributions payable by the company to the scheme and amounted to £
Contributions totalling £
|
Share capital |
Allotted, called up and fully paid shares
|
2024 |
2023 |
|||
|
No. |
£ |
No. |
£ |
|
|
|
|
100,000 |
|
100,000 |
Graham Engineering Limited
Notes to the Financial Statements for the Period from 1 September 2023 to 30 August 2024
|
Loans and borrowings |
Non-current loans and borrowings
|
2024 |
2023 |
|
|
Hire purchase contracts |
|
|
Current loans and borrowings
|
2024 |
2023 |
|
|
Hire purchase contracts |
|
|
Hire purchase contracts
Hire purchase contracts are secured on the assets concerned.
|
Obligations under leases and hire purchase contracts |
Hire purchase contracts
The total of future minimum lease payments is as follows:
|
2024 |
2023 |
|
|
Not later than one year |
|
|
|
Later than one year and not later than five years |
|
|
|
|
|
Operating leases
The total of future minimum lease payments is as follows:
|
2024 |
2023 |
|
|
Not later than one year |
|
|
|
Later than one year and not later than five years |
|
|
|
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the period was £
|
Dividends |
|
2024 |
2023 |
|||
|
£ |
£ |
|||
|
Dividend of £Nil (2023 - £ |
- |
500,000 |
||
Graham Engineering Limited
Notes to the Financial Statements for the Period from 1 September 2023 to 30 August 2024
|
Commitments |
Capital commitments
The total amount contracted for but not provided in the financial statements was £Nil (2023 - £
|
Related party transactions |
Key management compensation
|
2024 |
2023 |
|
|
Salaries and other short term employee benefits |
|
|
|
Transactions with directors and former directors |
|
2024 |
At 1 September 2023 |
Advances to director |
Interest |
At 30 August 2024 |
|
Executors of Mr CT Graham deceased |
||||
|
Loans from the company |
|
- |
- |
|
|
Mrs P Graham |
||||
|
Loans from the company |
|
|
2,464 |
|
|
Mr P Manley |
||||
|
Loans from the company |
- |
|
- |
|
|
2023 |
At 1 September 2022 |
Interest |
At 31 August 2023 |
|
Executors of Mr CT Graham deceased |
|||
|
Loans from the company |
|
- |
|
|
Mrs P Graham |
|||
|
Loans from the company |
|
2,181 |
|
Graham Engineering Limited
Notes to the Financial Statements for the Period from 1 September 2023 to 30 August 2024
Summary of transactions with other related parties
(The director Mrs S Davall is a trustee)
Loans to related parties
|
2024 |
Other related parties |
Total |
|
At start of period |
|
|
|
Advanced |
|
|
|
Interest |
|
|
|
At end of period |
|
|
|
|
||
|
2023 |
Other related parties |
Total |
|
At start of period |
|
|
|
Advanced |
|
|
|
Repaid |
( |
( |
|
Interest |
|
|
|
At end of period |
|
|
|
|
||
|
Controlling party |
The company is controlled by CT Graham Discretionary Trust who own 84% of the issued share capital. The ultimate controlling party is the Trustees of CT Graham Discretionary Trust being Mrs P Graham, Mrs S Davall, Mrs C Graham-Hodson and Mrs K Sparkes.