Fairfield Garage (L-o-S) Ltd - Limited company accounts 11.4

REGISTERED NUMBER: 00916058 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2013

FOR

FAIRFIELD GARAGE (LEIGH-ON-SEA) LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

4

Profit and Loss Account

6

Balance Sheet

7

Notes to the Financial Statements

8

DIRECTORS:

M A K Styles

S N Goldring

SECRETARY:

S N Goldring

REGISTERED OFFICE:

Arterial Road

Eastwood

Leigh on Sea

Essex

SS9 4XX

REGISTERED NUMBER:

00916058 (England and Wales)

AUDITORS:

Goldwyns Limited

Registered Auditor

Chartered Accountants

Rutland House

90-92 Baxter Avenue

Southend on Sea

Essex

SS2 6HZ

The directors present their strategic report for the year ended 31 December 2013.

REVIEW OF BUSINESS

During 2013, the company again over-performed in relation to the levels anticipated within the challenging targets,

despite not quite matching the previous year's achievement.

The marginal decrease was largely due to the disruption to facilities resultant from the major refurbishment and

expansion work carried out for the duration of the second half of the year. Whilst the significant repairs undertaken have

been detrimental to the profitability of the company, the underlying results remain robust.

Irrespective, however, of this handicap, Fairfield's performance, prior to taking account of the investment expenditure,

exceeded the average of the BMW and MINI dealership network by 62% and very nearly matched the top performers in

terms of return on sales.

The investment project was completed both within budget and planned time scales, permitting the highly successful

launch of the BMW i sub brand.

Client reaction to the vastly improved facilities has been exceptionally encouraging and, together with a plethora of new

model launches, is assisting in the generation of unprecedented levels of footfall.

Work upon phase two of Fairfield's redevelopment plans, involving the relocation of the MINI element of the business to

a newly built premises, located on site adjacent to that of BMW, is now underway and construction is anticipated to

commence within the second half of the year.

Due to the nature of the project, it will be considerably less disruptive to trading than was the case for phase one.

To compliment the project, an internal reorganisation has taken place, allowing the managing director to concentrate

and focus his full attention upon examining every aspect of the scheme with a view to ensuring that it is carried out in

the most efficient and cost effective manner possible.

Accordingly, by taking advantage of the industry leading facilities, new model launches and by fully embracing the

modern retailing concept, the company is exceptionally well positioned to meet the vastly extended registration targets

imposed by the manufacturer whilst also predicting a 38% increase in profitability.

PRINCIPAL RISKS AND UNCERTAINTIES

Conversely, as with all businesses, there is an inherent level of risk and uncertainty associated with constantly evolving

and fluctuating market conditions. This applies within the motor industry itself, to government economic policy and the

economic climate both within the United Kingdom and, indeed, globally, although, it should be noted that such factors

currently appear favourable.

ON BEHALF OF THE BOARD:

S N Goldring - Secretary

13 August 2014

The directors present their report with the financial statements of the company for the year ended 31 December 2013.

DIVIDENDS

Interim dividends per share were paid during the year as follows:

"A" Ordinary £1

-

£12.72135

- 6 April 2013

"B" Ordinary £1

-

£12.72135

- 6 April 2013

The total distribution of dividends for the year ended 31 December 2013 will be £ 500,000 .

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2013 to the date of this report.

M A K Styles

S N Goldring

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Report of the Directors and the financial statements in accordance with

applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors

have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting

Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not

approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the

company and of the profit or loss of the company for that period. In preparing these financial statements, the directors

are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the

company's transactions and disclose with reasonable accuracy at any time the financial position of the company and

enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for

safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud

and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies

Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have

taken as a director in order to make himself aware of any relevant audit information and to establish that the company's

auditors are aware of that information.

AUDITORS

The auditors, Goldwyns Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

S N Goldring - Secretary

13 August 2014

We have audited the financial statements of Fairfield Garage (Leigh-on-Sea) Limited for the year ended

31 December 2013 on pages six to fifteen. The financial reporting framework that has been applied in their preparation

is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

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 a Report of the Auditors 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.

Respective responsibilities of directors and auditors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give

reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or

error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances

and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates

made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and

non-financial information in the Strategic Report and the Report of the Directors to identify material inconsistencies with

the audited financial statements and to identify any information that is apparently materially incorrect based on, or

materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of

any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2013 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Strategic Report and the Report of the Directors for the financial year for

which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

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.

A R Millman FCA (Senior Statutory Auditor)

for and on behalf of Goldwyns Limited

Registered Auditor

Chartered Accountants

Rutland House

90-92 Baxter Avenue

Southend on Sea

Essex

SS2 6HZ

13 August 2014

TURNOVER

46,787,857

42,138,406

Cost of sales

44,822,192

40,040,568

GROSS PROFIT

1,965,665

2,097,838

Administrative expenses

2,109,758

1,293,888

(144,093

)

803,950

Other operating income

646,830

489,177

OPERATING PROFIT

3

502,737

1,293,127

Income from fixed asset investments

20,619

-

Interest receivable and similar income

4

44,476

10,890

65,095

10,890

567,832

1,304,017

Interest payable and similar charges

5

19,636

14,748

PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION

548,196

1,289,269

Tax on profit on ordinary activities

6

65,348

341,245

PROFIT FOR THE FINANCIAL YEAR

482,848

948,024

CONTINUING OPERATIONS

None of the company's activities were acquired or discontinued during the current year or previous year.

TOTAL RECOGNISED GAINS AND LOSSES

The company has no recognised gains or losses other than the profits for the current year or previous year.

FIXED ASSETS

Tangible assets

8

5,167,518

4,468,114

Investment property

9

412,073

-

5,579,591

4,468,114

CURRENT ASSETS

Stocks

10

6,979,987

5,199,921

Debtors

11

1,727,277

1,211,722

Investments

12

305,176

207,666

Cash at bank and in hand

3,555

439,599

9,015,995

7,058,908

CREDITORS

Amounts falling due within one year

13

6,614,599

3,528,883

NET CURRENT ASSETS

2,401,396

3,530,025

TOTAL ASSETS LESS CURRENT LIABILITIES

7,980,987

7,998,139

CREDITORS

Amounts falling due after more than one year

14

1,194,543

1,194,543

NET ASSETS

6,786,444

6,803,596

CAPITAL AND RESERVES

Called up share capital

18

39,304

39,304

Share premium

19

44,889

44,889

Capital redemption reserve

19

38,828

38,828

Profit and loss account

19

6,663,423

6,680,575

SHAREHOLDERS' FUNDS

26

6,786,444

6,803,596

The financial statements were approved by the Board of Directors on 13 August 2014 and were signed on its behalf by:

M A K Styles - Director

S N Goldring - Director

1.	ACCOUNTING POLICIES

Accounting convention

The financial statements have been prepared under the historical cost convention and in accordance with

applicable accounting standards.

Financial Reporting Standard number 1

Exemption has been taken from preparing a cash flow statement on the grounds that the parent company

includes the subsidiary in its published financial statements.

Turnover

Turnover represents the net accrued income of a BMW and MINI dealership, excluding value added tax. Income

from the sale of cars, parts and associated goods are recognised in the period in which the customer takes legal

responsibility for the goods. Income receivable for the provision of services, including bodyshop repair work, is

recognised in the period to which entitlement is incurred.

Tangible fixed assets

Depreciation is provided on all tangible assets at rates calculated to write off the cost, less estimated residual

value, of each asset evenly over its expected useful life as follows:

Freehold property

- 2% on cost

Leasehold property

- evenly over the lease term

Plant and machinery

- four to ten years

Fixtures and fittings

- two to four years

Computer equipment

- three years

Investment property

Investment property is shown at most recent valuation. Any aggregate surplus or deficit arising from changes in

market value is transferred to a revaluation reserve.

Current asset investments

The company has a policy of investing surplus reserves into short term property development agreements,

where these are anticipated to return a higher yield than fixed term cash deposits. During the development of the

properties they are recognised at cost, less any necessary provision for impairment.

In accordance with Financial Reporting Standard 26 once the development is complete and the property is

available for sale, the current asset investment is then recognised at market value with any gains or losses

accruing reflected in the revaluation reserve. At the final disposal of the current asset, the total surplus or deficit

is recognised in the profit and loss account.

Stocks

Stock is valued at the lower of cost and net realisable value, as follows:

Vehicles

- actual cost of purchase

Parts, oil and consumables

- actual cost of purchase

Work in progress

- cost of direct materials and labour

Due allowance has been made for obsolete and slow moving items.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the

balance sheet date.

Hire purchase and leasing commitments

Assets held under finance leases, which are leases where substantially all the risks and rewards of ownership of

the asset have passed to the company, and hire purchase contracts are capitalised in the balance sheet and are

depreciated over their useful lives.

The capital elements of future obligations under leases and hire purchase contracts are included as liabilities in

the balance sheet. The interest elements of the rental obligations are charged in the profit and loss account over

the relevant period

Rentals paid under operating leases are charged to the profit and loss account as incurred.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension

scheme are charged to the profit and loss account in the period to which they relate.

2.	STAFF COSTS

2013

2012

£

£

Wages and salaries

2,832,622

2,800,129

Social security costs

286,661

273,938

Other pension costs

271

271

3,119,554

3,074,338

The average monthly number of employees during the year was as follows:

2013

2012

Sales

35

35

Service

31

31

Parts

10

10

Bodyshop

11

12

Accounts and administration

20

20

Directors

2

2

109

110

3.	OPERATING PROFIT

The operating profit is stated after charging:

2013

2012

£

£

Depreciation - owned assets

120,614

138,641

Depreciation - assets on finance leases

-

10,528

Auditors' remuneration

26,590

19,920

Other non-audit services

2,400

3,000

Operating leases - land & buildings

306,438

141,000

Directors' remuneration

55,278

54,571

Directors' pension contributions to money purchase schemes

271

271

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

1

1

4.

INTEREST RECEIVABLE AND SIMILAR INCOME

2013

2012

£

£

Other interest received

44,476

10,890

5.

INTEREST PAYABLE AND SIMILAR CHARGES

2013

2012

£

£

Bank interest

2,019

533

Loan interest

17,617

14,215

19,636

14,748

6.

TAXATION

Analysis of the tax charge

The tax charge on the profit on ordinary activities for the year was as follows:

2013

2012

£

£

Current tax:

UK corporation tax

65,732

341,245

Adjustments in respect of prior periods

(384

)

-

Tax on profit on ordinary activities

65,348

341,245

Factors affecting the tax charge

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is

explained below:

2013

2012

£

£

Profit on ordinary activities before tax

548,196

1,289,269

Profit on ordinary activities

multiplied by the standard rate of corporation tax

in the UK of 23% (2012 - 24%)

126,085

309,425

Effects of:

Expenses not deductible for tax purposes

5,069

9,550

Capital allowances in excess of depreciation

(51,931

)

-

Depreciation in excess of capital allowances

-

16,470

Utilisation of tax losses

(5,079

)

-

Adjustments to tax charge in respect of previous periods

(384

)

-

Change in rate of tax

1,134

6,950

Marginal tax relief

(9,546

)

(1,150

)

Current tax charge

65,348

341,245

7.

DIVIDENDS

2013

2012

£

£

"A" Ordinary shares of £1 each

Interim

382,811

-

"B" Ordinary shares of £1 each

Interim

117,189

-

500,000

-

8.	TANGIBLE FIXED ASSETS

Freehold

Short

Plant and

property

leasehold

machinery

£

£

£

COST

At 1 January 2013

4,789,234

319,699

1,074,007

Additions

133,280

30,695

197,400

Disposals

-

-

(83,923

)

At 31 December 2013

4,922,514

350,394

1,187,484

DEPRECIATION

At 1 January 2013

515,633

215,835

1,006,412

Charge for year

38,256

30,066

36,237

Eliminated on disposal

-

-

(83,923

)

At 31 December 2013

553,889

245,901

958,726

NET BOOK VALUE

At 31 December 2013

4,368,625

104,493

228,758

At 31 December 2012

4,273,601

103,864

67,595

Fixtures

and

Computer

fittings

equipment

Totals

£

£

£

COST

At 1 January 2013

98,730

90,301

6,371,971

Additions

425,677

33,055

820,107

Disposals

(61,348

)

(33,609

)

(178,880

)

At 31 December 2013

463,059

89,747

7,013,198

DEPRECIATION

At 1 January 2013

86,766

79,211

1,903,857

Charge for year

5,244

10,811

120,614

Eliminated on disposal

(61,339

)

(33,529

)

(178,791

)

At 31 December 2013

30,671

56,493

1,845,680

NET BOOK VALUE

At 31 December 2013

432,388

33,254

5,167,518

At 31 December 2012

11,964

11,090

4,468,114

9.	INVESTMENT PROPERTY

Total

£

COST

Additions

412,073

At 31 December 2013

412,073

NET BOOK VALUE

At 31 December 2013

412,073

The investment property was valued based on market value by the directors.

10.

STOCKS

2013

2012

£

£

Vehicle stock

6,773,814

5,022,149

Parts stock

135,223

129,208

Oil and consumable stock

8,682

8,287

Work-in-progress

62,268

40,277

6,979,987

5,199,921

11.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2013

2012

£

£

Trade debtors

966,473

732,042

Other debtors

458,537

307,399

VAT

144,681

-

Prepayments and accrued income

157,586

172,281

1,727,277

1,211,722

12.	CURRENT ASSET INVESTMENTS

2013

2012

£

£

Other

305,176

207,666

13.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2013

2012

£

£

Bank loans and overdrafts (see note 15)

186,170

-

Finance leases (see note 16)

2,092,399

618,308

Trade creditors

3,539,925

2,210,422

Tax

65,732

341,245

Social security and other taxes

76,669

111,130

Other creditors

94,787

53,798

Directors' loan accounts

384,975

8,392

Accrued expenses

173,942

185,588

6,614,599

3,528,883

14.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

2013

2012

£

£

Amounts owed to group undertakings

1,194,543

1,194,543

15.

LOANS

An analysis of the maturity of loans is given below:

2013

2012

£

£

Amounts falling due within one year or on demand:

Bank overdrafts

186,170

-

16.	OBLIGATIONS UNDER LEASING AGREEMENTS

Finance leases

2013

2012

£

£

Net obligations repayable:

Within one year

2,092,399

618,308

The following operating lease payments are committed to be paid within one year:

Land and buildings

2013

2012

£

£

Expiring:

Within one year

93,750

-

Between one and five years

75,000

123,000

In more than five years

18,000

18,000

186,750

141,000

17.	SECURED DEBTS

The following secured debts are included within creditors:

2013

2012

£

£

Bank overdraft

186,170

-

Stocking loans

4,599,016

1,959,398

4,785,186

1,959,398

Hire purchase agreements are secured over the assets financed by the agreements.

BMW Group retain title of the funded vehicle stock until settlement of the stocking loans.

In support of the company's banking arrangements, Barclays PLC hold first legal charge over one of the

properties of the company.