Park's (Ayr) Limited - Limited company accounts 18.2

REGISTERED NUMBER: SC135015 (Scotland)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2019

FOR

PARK'S (AYR) LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Income Statement

7

Other Comprehensive Income

8

Statement of Financial Position

9

Statement of Changes in Equity

10

Statement of Cash Flows

11

Notes to the Statement of Cash Flows

12

Notes to the Financial Statements

13

DIRECTORS:

D I Park

I B Mackay

W Cumming

R W Park

A S Bryce

G T Park

A G Noble

R B Hare

SECRETARY:

A G Noble

REGISTERED OFFICE:

Park House

14 Bothwell Road

Hamilton

ML3 0AY

REGISTERED NUMBER:

SC135015 (Scotland)

AUDITORS:

Thomas Barrie & Co LLP

Statutory Auditor

Chartered Accountants

Atlantic House

1a Cadogan Street

Glasgow

G2 6QE

BANKERS:

Bank of Scotland plc

110 St Vincent Street

Glasgow

G2 5ER

SOLICITORS:

Brodies LLP

110 Queen Street

Glasgow

G1 3BX

REVIEW OF BUSINESS

We aim to present a balanced and comprehensive review of the development and performance of our business during

the year and its position at the year end. Our review is consistent with the size and non-complex nature of our business

and is written in the context of the risks and uncertainties we face.

The company is in the motor trade and operates three separate franchises Volvo, Jaguar and Landrover.

We consider that our key financial performance indicators are those that communicate the financial performance and

strength of the company as a whole, these being turnover and operating profit.

2019

2018

£

£

Turnover

73,281,799

66,194,197

Sales have increased by over 10% during the year.

Overall, operating profit has decreased from £1,003,849 in 2018 to £819,127 and profit before tax has decreased from

£902,115 last year to £697,455. After taxation and dividends £446,231 has been deducted from reserves.

As for many businesses of our size, the business environment in which we operate continues to be challenging. The car

market in the UK is highly competitive and margins continue to be tight. We are of course also subject to consumer

spending patterns and consumers' overall level of disposable income within our economy.

With these risks and uncertainty in mind, we are aware that any plans for the future development of the business may be

subject to unforeseen events outside of our control.

PRINCIPAL RISKS AND UNCERTAINTIES

The main risks associated with the company's financial assets and liabilities are set out below.

Liquidity Risk

The objective of the company in managing liquidity risk is to ensure that it can meet its financial obligations as and

when they fall due. The company expects to meet its financial obligations through operating cash flows. In the event

that the operating cash flows would not cover all the financial obligations the company has credit facilities available.

Interest Rate Risk

The company borrows from its bankers using either overdrafts or term loans whose tenure depends on the nature of the

asset and management's view of the future direction of interest rate.

Credit Risk

The company has external debtors, however, the company undertakes assessments of its customers in order to ensure

that credit is not extended where there is a likelihood of default.

ON BEHALF OF THE BOARD:

A G Noble - Director

22 October 2019

The directors present their report with the financial statements of the company for the year ended 31 March 2019.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of the sale and service of private vehicles

together with the sale of motor accessories.

DIVIDENDS

An interim dividend of £1 per share was paid on 31 March 2019. The directors recommend that no final dividend be paid.

The total distribution of dividends for the year ended 31 March 2019 will be £ 1,000,000 .

FUTURE DEVELOPMENTS

The directors will continue to look for opportunities to expand the company's core business.

DIRECTORS

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

D I Park

I B Mackay

W Cumming

R W Park

A S Bryce

G T Park

A G Noble

Other changes in directors holding office are as follows:

R B Hare was appointed as a director after 31 March 2019 but prior to the date of this report.

Qualifying third party indemnity provisions

The company has put in place qualifying third party indemnity provisions for all of the directors.

EMPLOYEES

The company is committed to providing a safe and pleasant environment for its employees and training and career

development opportunities are available. No discrimination is made on the grounds of age, colour, disability, marital

status, race, religion or sex. Employees are given the opportunity to develop and progress according to their ability.

Disabled people are given fair consideration for all job vacancies for which they offer themselves as suitable applicants,

having regard to their particular aptitudes and abilities.

Every effort is made to keep staff informed of, and involved in, the operations and progress of the group.

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;

-	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, Thomas Barrie & Co LLP, will be proposed for re-appointment at the forthcoming Annual General

Meeting.

ON BEHALF OF THE BOARD:

A G Noble - Director

22 October 2019

Opinion

We have audited the financial statements of Park's (Ayr) Limited (the 'company') for the year ended 31 March 2019

which comprise the Income Statement, Other Comprehensive Income, Statement of Financial Position, Statement of

Changes in Equity, Statement of Cash Flows and Notes to the Statement of Cash Flows, 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 March 2019 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 four, 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.

Gordon Cruickshank CA (Senior Statutory Auditor)

for and on behalf of Thomas Barrie & Co LLP

Statutory Auditor

Chartered Accountants

Atlantic House

1a Cadogan Street

Glasgow

G2 6QE

23 October 2019

66,194,197

TURNOVER

3

73,281,799

414,167

Other operating income

755,084

66,608,364

74,036,883

61,353,320

Raw materials and consumables

68,454,262

5,255,044

5,582,621

2,439,202

Staff costs

4

2,766,025

119,017

Depreciation

181,343

1,692,976

Other operating expenses

1,816,126

4,251,195

4,763,494

1,003,849

OPERATING PROFIT

5

819,127

101,694

Interest payable and similar expenses

6

121,672

902,155

PROFIT BEFORE TAXATION

697,455

175,230

Tax on profit

7

143,686

726,925

PROFIT FOR THE FINANCIAL YEAR

553,769

726,925

PROFIT FOR THE YEAR

553,769

-

OTHER COMPREHENSIVE INCOME

-

726,925

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

553,769

FIXED ASSETS

532,255

Tangible assets

9

450,846

CURRENT ASSETS

14,130,149

Stocks

10

12,489,249

4,794,238

Debtors

11

5,161,365

303,899

Cash at bank and in hand

938,912

19,228,286

18,589,526

CREDITORS

13,872,241

Amounts falling due within one year

12

13,598,303

5,356,045

NET CURRENT ASSETS

4,991,223

5,888,300

TOTAL ASSETS LESS CURRENT LIABILITIES

5,442,069

CAPITAL AND RESERVES

1,000,000

Called up share capital

15

1,000,000

4,888,300

Retained earnings

16

4,442,069

5,888,300

SHAREHOLDERS' FUNDS

5,442,069

The financial statements were approved by the Board of Directors on 22 October 2019 and were signed on its behalf by:

A G Noble - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 April 2017

1,000,000

5,161,375

6,161,375

Changes in equity

Dividends

-

(1,000,000

)

(1,000,000

)

Total comprehensive income

-

726,925

726,925

Balance at 31 March 2018

1,000,000

4,888,300

5,888,300

Changes in equity

Dividends

-

(1,000,000

)

(1,000,000

)

Total comprehensive income

-

553,769

553,769

Balance at 31 March 2019

1,000,000

4,442,069

5,442,069

Cash flows from operating activities

(1,674,363

)

Cash generated from operations

1

2,031,850

(101,694

)

Interest paid

(121,672

)

(423,432

)

Tax paid

(175,230

)

(2,199,489

)

Net cash from operating activities

1,734,948

Cash flows from investing activities

(602,670

)

Purchase of tangible fixed assets

(99,935

)

3,333

Sale of tangible fixed assets

-

(599,337

)

Net cash from investing activities

(99,935

)

Cash flows from financing activities

(1,000,000

)

Equity dividends paid

(1,000,000

)

(1,000,000

)

Net cash from financing activities

(1,000,000

)

(3,798,826

)

Increase/(decrease) in cash and cash equivalents

635,013

4,102,725

Cash and cash equivalents at beginning of year

2

303,899

303,899

Cash and cash equivalents at end of year

2

938,912

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

2019

2018

£

£

Profit before taxation

697,455

902,155

Depreciation charges

181,343

122,350

Profit on disposal of fixed assets

-

(3,333

)

Finance costs

121,672

101,694

1,000,470

1,122,866

Decrease/(increase) in stocks

1,640,900

(4,922,592

)

(Increase)/decrease in trade and other debtors

(367,127

)

732,130

(Decrease)/increase in trade and other creditors

(242,393

)

1,393,233

Cash generated from operations

2,031,850

(1,674,363

)

2.	CASH AND CASH EQUIVALENTS

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

these Statement of Financial Position amounts:

Year ended 31 March 2019

31.3.19

1.4.18

£

£

Cash and cash equivalents

938,912

303,899

Year ended 31 March 2018

31.3.18

1.4.17

£

£

Cash and cash equivalents

303,899

4,102,725

1.	STATUTORY INFORMATION

Park's (Ayr) Limited is a private company, limited by shares, registered in Scotland, registration number

SC135015. The registered office is Park House, 14 Bothwell Road, Hamilton, ML3 0AY.

The presentation currency of the financial statements is Pounds Sterling (£).

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.

Going Concern

The group meets is day to day working capital requirements through loans from finance houses and a group

overdraft facility which is due for renewal withing the next financial year.

The group's forecasts and projections, taking into account of possible changes in trading performance, show that

the company will be able to operate within the level of its current facilities. The group will open renewal

negotiations with the bank in due course, who have indicated that it is their intention to renew all group

facilities. The group has held discussions with its bankers about its future borrowing needs and no matters have

been drawn to its attention to suggest that finance may not be forthcoming on acceptable terms.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The

Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party

transactions with wholly owned subsidiaries within the group.

Significant judgements and estimates

In preparing these consolidated financial statements, the directors are required to make judgements, estimates

and assumptions that affect the application of the Group’s accounting policies and the reported amounts of

assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying

assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.

The following areas provide estimation uncertainty.

Used Vehicle Stock

Used vehicle stock valuations which are derived from expert vehicle valuation data and directors' judgements.

Tangible Fixed Assets

The estimates and assumptions made to determine asset lives require judgements to be made as regards useful

lives and residual values. The useful lives and residual values of the company's financial assets are determined

by management at the time the asset is acquired and reviewed annually for appropriateness. The lives are based

on management experience with similar assets.

Bad Debts

Bad debts are provided for where objective evidence of the need for a provision exists.

Turnover

Turnover is measured at the fair value of consideration received or receivable, taking into account the amount of

any discounts and rebates allowed by the entity, but excluding value added tax and other sales taxes.

Sale of Goods

Revenue is recognised when the significant risks and rewards of ownership have been transferred to the

customer, recovery of the consideration is probable, the associated costs and possible return of goods can be

estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue

can be measured reliably.Revenue is measured net of returns, trade discounts and volume rebates.

Services

Income from services is recognised when performed, such that risks and rewards have been transferred.

Commission

If the Company acts in the capacity of an agent rather than as the principal in a transaction, then the revenue

recognised is the net amount of commission made by the Company.

Tangible fixed assets

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.

Plant and machinery

-

10% to 25% on cost

Fixtures and fittings

-

20% to 25% on cost

Computer equipment

-

25% on cost

The carrying value of tangible fixed assets are reviewed for impairment if events or changes in circumstances

indicate the carrying value may not be reasonable.

Stocks

Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance

for obsolete and slow moving items.

Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in

bringing stocks to their present location and condition.

Vehicle stock held on a consignment basis are not recorded in the balance sheet. Amounts paid for these

vehicles are reflected within debtors as deposits.

Financial instruments

Basic financial instruments are recognised at amortised cost, except for investments in nonconvertible preference

and non-puttable ordinary shares which are measured at fair value, with changes recognised in profit or loss.

Derivative financial instruments are initially recorded at cost and thereafter at fair value with changes recognised

in profit or loss.

Debtors

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured

initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the

effective interest method, less any impairment.

Cash and cash equivalents

Cash and cash equivalents comprises cash balances. Bank overdrafts that are payable on demand and form an

integral part of the company's cash management are included as a component of cash and cash equivalents for

the purpose only of the cash flow statement.

Creditors

Short term trade creditors are measured at the transaction price. Other financial liabilities, including bank loans,

are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost

using the effective interest method.

Provisions

Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current

market assessments of the time value of money and the risks specific to the liability. The unwinding of the

discount is recognised as finance cost.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to

the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

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 statement of financial position date.

Deferred tax

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

statement of financial position 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.

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.

Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the

amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a

result of past service provided by the employee and the obligation can be estimated reliably.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by class of business is given below:

2019

2018

£

£

Sale of goods

71,889,046

65,403,820

Service income

1,392,753

790,377

73,281,799

66,194,197

Turnover represents net invoiced sales of new & used cars as well as the repair & servicing of motor vehicles.

4.	EMPLOYEES AND DIRECTORS

2019

2018

£

£

Wages and salaries

2,478,956

2,195,914

Social security costs

250,678

222,367

Other pension costs

36,391

20,921

2,766,025

2,439,202

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

2019

2018

Office and Management

26

23

Production

63

58

89

81

2019

2018

£

£

Directors' remuneration

-

-

5.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2019

2018

£

£

Depreciation - owned assets

181,344

122,350

Profit on disposal of fixed assets

-

(3,333

)

Auditors' remuneration

6,000

4,500

In accordance with SI 2008/489 the company has not disclosed the fees payable to the company’s auditors for

‘Other services’ as this information is included in the consolidated financial statements of Park's of Hamilton

(Holdings) Limited.