Moto GB Ltd - Limited company accounts 18.2

REGISTERED NUMBER: 03989635 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2018

FOR

MOTO GB LTD

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Statement of Comprehensive Income

7

Balance Sheet

8

Statement of Changes in Equity

9

Cash Flow Statement

10

Notes to the Cash Flow Statement

11

Notes to the Financial Statements

12

DIRECTORS:

K J Mason

Mrs E Mason

REGISTERED OFFICE:

White Bear Yard

Park Road

Adlington

Chorley

Lancashire

PR7 4HZ

REGISTERED NUMBER:

03989635 (England and Wales)

AUDITORS:

Fairhurst

Statutory Auditor

Chartered Accountants

Douglas Bank House

Wigan Lane

Wigan

Lancashire

WN1 2TB

BANKERS:

Yorkshire Bank plc

3 Orchard Street

Preston

PR1 2EN

The directors present their strategic report for the year ended 31 December 2018.

REVIEW OF BUSINESS

Moto GB Limited continues to perform well with sales in excess of £40million, as the breadth, quality and price of its

products and services continues to appeal to customers.

A newly acquired outlet in Stoke-on-Trent and the relationship with key suppliers have contributed to the overall success

of the business, with the new KTM brand in the UK performing well.

Current trading has not yet been affected by uncertainty over Brexit and sales, margins and overall profitability are

above expectations, with the results for 2019 anticipated to improve again on 2018.

Key Performance Indicators

2018

2017

£'000

£'000

Turnover

40,610

32,550

Gross profit

7,697

6,568

Gross margin (%)

18.9%

20.2%

EBITDA

2,462

2,256

PRINCIPAL RISKS AND UNCERTAINTIES

The principal financial risks associated with the company's ability to monitor and manage:

Cashflow

The company has certain transactions in foreign currencies but is not exposed to any material risks relating to exchange

fluctuations. The company has a shared bank facility with fellow subsidiary companies operating within the agreed

facility. The company's exposure to interest rate movements is not considered material and hence it is not believed to be

necessary to hedge against rates.

Credit Risk

The company's principal financial asset is in stock. The credit risk is limited by an exposure to a number of major

customers on whom either credit reports are obtained or whose annual accounts are regularly reviewed. Supplier terms

are reviewed regularly, so as to take advantage of price and exchange rates, where appropriate.

Liquidity Risk

The cash facilities available to the company have been compared to their likely credit requirements over the next 12

months, from the date of signing these financial statements and are deemed to be adequate.

Price Risk

The company is exposed to a price risk arising on its bike purchases; it attempts to manage it's exposure by matching

price movements with selling prices achieved.

ON BEHALF OF THE BOARD:

K J Mason - Director

23 September 2019

The directors present their report with the financial statements of the company for the year ended 31 December 2018.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of wholesale and retail distributor of

motorcycles and accessories.

DIVIDENDS

The total distribution of dividends for the year ended 31 December 2018 is £4,000 (2017 - £10,000) and it is proposed

that the remaining profit of £1,871,827 (2017 - £1,616,755) be taken to reserves.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2018 to the date of this

report.

K J Mason

Mrs E Mason

EMPLOYEES

Regular meetings are held involving directors, managers and supervisory staff to convey information to employees

regarding company performance and other factors affecting the business.

The company's policy is, wherever practicable, to encourage and assist the employment of disabled people, having

regard to the nature of the work and their disability.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, 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), including Financial Reporting Standard 102 'The

Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not

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

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

are required to:

-	select suitable accounting policies and then apply them consistently;

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

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

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

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

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

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

and other irregularities.

STATEMENT 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 or she ought to have

taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the

company's auditors are aware of that information.

ON BEHALF OF THE BOARD:

K J Mason - Director

23 September 2019

Opinion

We have audited the financial statements of Moto GB Ltd (the 'company') for the year ended 31 December 2018 which

comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow

Statement and Notes to the Cash Flow Statement, 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 31 December 2018 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.

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 Auditors' 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to

you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic

Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors

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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	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; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit,

we have not identified material misstatements in the Strategic Report or the Report of the Directors.

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 three, 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 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.

Auditors' 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 a Report of the Auditors 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.

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 Report of the Auditors.

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 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.

John B S Fairhurst BA(Hons) FCA (Senior Statutory Auditor)

for and on behalf of Fairhurst

Statutory Auditor

Chartered Accountants

Douglas Bank House

Wigan Lane

Wigan

Lancashire

WN1 2TB

23 September 2019

TURNOVER

40,609,789

32,549,953

Cost of sales

32,912,878

25,981,905

GROSS PROFIT

7,696,911

6,568,048

Administrative expenses

5,274,128

4,508,927

OPERATING PROFIT

2,422,783

2,059,121

Interest payable and similar expenses

4

83,563

52,645

PROFIT BEFORE TAXATION

5

2,339,220

2,006,476

Tax on profit

6

463,393

379,721

PROFIT FOR THE FINANCIAL YEAR

1,875,827

1,626,755

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,875,827

1,626,755

FIXED ASSETS

Tangible assets

8

1,203,579

719,081

CURRENT ASSETS

Stocks

9

12,707,751

10,996,026

Debtors

10

5,880,420

5,704,220

Cash at bank and in hand

559,453

78,785

19,147,624

16,779,031

CREDITORS

Amounts falling due within one year

11

12,119,873

11,140,134

NET CURRENT ASSETS

7,027,751

5,638,897

TOTAL ASSETS LESS CURRENT LIABILITIES

8,231,330

6,357,978

PROVISIONS FOR LIABILITIES

15

42,331

40,806

NET ASSETS

8,188,999

6,317,172

CAPITAL AND RESERVES

Called up share capital

16

1,000

1,000

Retained earnings

17

8,187,999

6,316,172

SHAREHOLDERS' FUNDS

8,188,999

6,317,172

The financial statements were approved by the Board of Directors on 23 September 2019 and were signed on its behalf by:

K J Mason - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2017

1,000

4,699,417

4,700,417

Changes in equity

Dividends

-

(10,000

)

(10,000

)

Total comprehensive income

-

1,626,755

1,626,755

Balance at 31 December 2017

1,000

6,316,172

6,317,172

Changes in equity

Dividends

-

(4,000

)

(4,000

)

Total comprehensive income

-

1,875,827

1,875,827

Balance at 31 December 2018

1,000

8,187,999

8,188,999

Cash flows from operating activities

Cash generated from operations

1

(262,761

)

(1,211,684

)

Interest paid

(83,563

)

(52,645

)

Tax paid

(628,148

)

(185,242

)

Net cash from operating activities

(974,472

)

(1,449,571

)

Cash flows from investing activities

Purchase of tangible fixed assets

(585,655

)

(139,562

)

Sale of tangible fixed assets

41,553

339,333

Net cash from investing activities

(544,102

)

199,771

Cash flows from financing activities

Movement in intercompany loans

635,687

1,061,573

Equity dividends paid

(4,000

)

(10,000

)

Net cash from financing activities

631,687

1,051,573

Decrease in cash and cash equivalents

(886,887

)

(198,227

)

Cash and cash equivalents at beginning of year

2

(4,521,077

)

(4,322,850

)

Cash and cash equivalents at end of year

2

(5,407,964

)

(4,521,077

)

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2018

2017

£

£

Profit before taxation

2,339,220

2,006,476

Depreciation charges

91,060

201,147

Profit on disposal of fixed assets

(31,457

)

(175,772

)

Finance costs

83,563

52,645

2,482,386

2,084,496

Increase in stocks

(1,711,725

)

(2,401,149

)

Increase in trade and other debtors

(130,290

)

(1,053,304

)

(Decrease)/increase in trade and other creditors

(903,132

)

158,273

Cash generated from operations

(262,761

)

(1,211,684

)

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these

Balance Sheet amounts:

Year ended 31 December 2018

31/12/18

1/1/18

£

£

Cash and cash equivalents

559,453

78,785

Bank overdrafts

(5,967,417

)

(4,599,862

)

(5,407,964

)

(4,521,077

)

Year ended 31 December 2017

31/12/17

1/1/17

£

£

Cash and cash equivalents

78,785

73,691

Bank overdrafts

(4,599,862

)

(4,396,541

)

(4,521,077

)

(4,322,850

)

1.	STATUTORY INFORMATION

Moto GB Ltd is a private company, limited by shares , registered in England and Wales. The company's

registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been 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. The financial statements have been prepared under the historical cost convention.

Significant judgements and estimates

Preparation of the financial statements requires management to make significant judgements and estimates. The

items in the financial statements where these judgements and estimates have been made include:

(a) Stock provision

Stock provisions have been estimated by the company where the anticipated net realisable value of stock items is

lower than cost. Net realisable value has been determined by considering the stock items current and expected

sales value, overall stock quantity and sales volume.

(b) Deferred tax

Management judgement is required to determine the amount of deferred tax assets that can be recognised, based

upon the likely timing and level of future taxable profits together with an assessment of the effect of future tax

planning strategies. In evaluating our ability to recover our deferred tax assets, we consider projected future

taxable income and recent financial operations.

In projecting future taxable income, we begin with historical results and incorporate assumptions including the

amount of future pre-tax operating income, the reversal of taxable temporary differences, and the implementation

of feasible and prudent tax planning strategies. These assumptions require significant judgement about the

forecasts of future taxable income and are consistent with the plans and estimates we are using to manage the

underlying business.

(c) Useful economic lives

The useful economic lives of fixed assets are assessed on an annual basis based on the latest available

information. Management believe that the useful economic lives being used currently are still appropriate.

Turnover

Turnover represents the fair value of income received from the sale and leasing of new and used motor bikes to

both the general public and to other group companies, excluding discounts and value added tax.

Finance commission is received monthly based on the volume of bikes sold.

The company recognises revenue when the goods have been delivered and the title of goods has passed.

Tangible fixed assets

Tangible fixed assets are measured at cost less depreciation and any impairment.

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value

of each asset over its estimated useful life, as follows:

Freehold property - 2% on cost

Vehicles on rental - over the period of the lease

Plant and machinery - 25% on reducing balance

Fixtures and fittings - 20% on cost

Motor vehicles - 20% on cost

Computer equipment - 20% on cost

Impairment of assets

At each reporting date fixed assets are reviewed to determine whether there is any indication that those assets

have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any

affected asset is estimated and compared with its carrying amount. If the recoverable amount is lower, the

carrying amount of the asset is reduced to its recoverable amount and an impairment loss is recognised

immediately in the profit or loss.

If an impairment loss is subsequently reversed, the carrying amount of the asset is increased to the revised

estimate of its recoverable amount, but not to exceed the amount that would have been determined had no

impairment loss been recognised for the asset in prior periods. A reversal of an impairment loss is recognised

immediately in the profit or loss.

Stocks

Stocks are stated at the lower of cost and selling price after any impairment for obsolete and slow moving items.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive

Income, except to the extent that it relates to items recognised in other comprehensive income or directly in

equity.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or

substantively enacted by the balance sheet date.

Deferred tax

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

sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from

those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that

have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the

timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they

will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the

statement of financial positionbalance sheet date. Transactions in foreign currencies are translated into sterling

at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at

the operating result.

Leases

Rentals payable under operating leases are charged to the profit or loss on a straight-line basis over the lease

term. The aggregate benefit of lease incentives are recognised as a reduction to the expense recognised over the

lease term on a straight line basis.

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 profit or loss in the period to which they relate.

Financial instruments

Short term trade debtors and trade creditors are measured at the transaction price. Other financial assets and

liabilities, including related party loans shall be measured at amortised cost using the effective interest rate.

Financial assets and liabilities that have no stated interest rate and are payable within one year shall be measured

at the undiscounted amount due.

3.	EMPLOYEES AND DIRECTORS

2018

2017

£

£

Wages and salaries

3,170,414

2,701,372

Social security costs

287,087

248,429

Other pension costs

41,247

19,262

3,498,748

2,969,063

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

2018

2017

Sales and administration

130

95

2018

2017

£

£

Directors' remuneration

-

-

4.

INTEREST PAYABLE AND SIMILAR EXPENSES

2018

2017

£

£

Bank interest

82,249

24,283

Interest on tax paid

1,314

-

Intercompany loan interest

-

28,362

83,563

52,645

5.	PROFIT BEFORE TAXATION

The profit is stated after charging/(crediting):

2018

2017

£

£

Other operating leases

229,000

229,000

Depreciation - owned assets

91,061

201,146

Profit on disposal of fixed assets

(31,457

)

(175,772

)

Auditors' remuneration

13,500

11,250

- accountancy and taxation fees

4,000

16,616

6.

TAXATION

Analysis of the tax charge

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

2018

2017

£

£

Current tax:

UK corporation tax

443,333

360,979

Overprovision in prior year

18,535

(2,600

)

Total current tax

461,868

358,379

Deferred tax - current year

1,525

21,342

Tax on profit

463,393

379,721

Reconciliation of total tax charge included in profit and loss

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

explained below:

2018

2017

£

£

Profit before tax

2,339,220

2,006,476

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2017 - 19.250%)

444,452

386,247

Effects of:

Expenses not deductible for tax purposes

484

(68

)

Income not taxable for tax purposes

-

(606

)

Adjustments to tax charge in respect of previous periods

18,535

(2,600

)

Fixed asset differences

402

(431

)

Adjust closing deferred tax rate

(5,249

)

(5,393

)

Adjust opening deferred tax rate

4,769

2,572

Total tax charge

463,393

379,721

7.

DIVIDENDS

2018

2017

£

£

Final

4,000

10,000