R.T. Rate Limited - Limited company accounts 20.1

REGISTERED NUMBER: 00553972 (England and Wales)

R.T. RATE LIMITED

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

Page

Company Information

1

Chairman's Report

2

Strategic Report

3

Report of the Directors

4

Report of the Independent Auditors

6

Statement of Income and Retained Earnings

9

Statement of Financial Position

10

Statement of Cash Flows

11

Notes to the Statement of Cash Flows

12

Notes to the Financial Statements

14

DIRECTORS:

C.J. Rate

M. Day

Mrs C.A.M. Rate

S J Rate

L. Padbury-Clark

REGISTERED OFFICE:

Rates Ford

Hogg Lane

Grays

Essex

RM17 5QL

REGISTERED NUMBER:

00553972 (England and Wales)

AUDITORS:

Bland Baker

Chartered Accountants and

Registered Auditor

21 Lodge Lane

Grays

Essex

RM17 5RY

2019 was another interesting year with yet more change.

Turnover increased by a very respectable £6.25 million in what proved to be a competitive and aggressive

market.

The new vehicle department turned in a very strong performance but margin reductions throughout the year

had an adverse effect on overall company profitability.

The used car sales department also enjoyed success throughout the year achieving numbers similar to that of

the previous year with margins remaining stable.

The Parts, Service and Quicklane departments turnover and margins increased over the previous year despite

operational changes to the business implemented by Ford.

Our Customer Viewpoint (CVP), which measures customer satisfaction, continued to achieve the high scores

it has over the last 10 years.

Expense levels were within budget but are always under scrutiny.

In the forthcoming years I anticipate that dealer margins will continue to reduce and there to be less

dependence upon incentives. Naturally this may change the way future trading is structured. Also,

electrification is making further traction in the industry and customer awareness and demands continue to

increase in this respect too. It is apparent that the cost to own and run such vehicles is featuring more in our

customers buying process.

Overall, I am pleased to report that the company's financial position is strong, with substantial cash reserves,

yet we always strive to improve profitability and will continue to adapt to an ever changing market place.

Whilst the recent global pandemic has created some economic uncertainties, both at home and abroad, I

believe that the company is well positioned to react to any future challenges.

Finally, I would like to thank all of the staff for the hard work and dedication to the company.

C.J. Rate - Chairman

15 July 2020

The directors present their strategic report for the year ended 31 December 2019.

REVIEW OF BUSINESS

A review of the business is contained within the Chairman's Report which forms part of this Strategic

Report.

The company has strong cash reserves with minimal short term borrowings.

The directors consider that whilst the company has identified certain specific business risks below, they are

of the opinion that suitable measures are in place to address them to ensure that ongoing operations do not

affect the company's day to day obligations.

PRINCIPAL RISKS AND UNCERTAINTIES

The company faces the following principal risks:

Liquidity risk:

The company has strong cash reserves and primarily self funds its operations although periodically it utilises

short term borrowing to fund any short term liquidity issues. The company's general expansion naturally

creates increased pressure on its cash reserves but has substantial support from its bankers.

Economic risk:

The uncertainties and challenges surrounding Brexit and the inherent implications on job security affects

consumer confidence. Notwithstanding, the directors continue to review opportunities to increase revenue

streams to mitigate any associated risks. The global pandemic of Covid-19 presented other uncertainties

albeit the relaxation of the lockdown rules have shown a good return to new and used car sales and so too

with the service department which is operating to capacity with a partially reduced workforce.

Environmental risk:

Concerns regarding CO2 emissions and the corresponding pressure on manufacturers to develop and

improve alternate engine profiles and, in particular, the uncertainty surrounding the Government's official

policy towards diesel vehicles.

Competition risk:

As always competition is strong in the new and used car sector with ever increasing pressure on margins and

after market sales and servicing.

GOING CONCERN

Since the balance sheet date, the company has continued to generate significant profits and positive

operating cashflows and has been able to meet its financial obligations as they become due.

The directors have reasonable grounds to assume that this will not change in the future and as such the

directors continue to adopt the going concern basis of preparation of the financial statements.

ON BEHALF OF THE BOARD:

C.J. Rate - Director

15 July 2020

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

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of a Ford main dealership, including

new and used car sales, parts sales and servicing.

DIVIDENDS

Dividends voted in the year ended 31 December 2019 was £65,000 (2018 - 190,700).

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2019 to the date

of this report.

C.J. Rate

M. Day

Mrs C.A.M. Rate

S J Rate

L. Padbury-Clark

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Annual Report and the financial statements in accordance

with applicable law and regulations.

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

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

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

AUDITORS

The auditors, Bland Baker, will be proposed for re-appointment at the forthcoming Annual General

Meeting.

ON BEHALF OF THE BOARD:

C.J. Rate - Director

15 July 2020

Opinion

We have audited the financial statements of R.T. Rate Limited (the 'company') for the year ended

31 December 2019 which comprise the Statement of Income and Retained Earnings, Statement of Financial

Position, 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 December 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 Annual Report, 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.

D. M. Baker (Senior Statutory Auditor)

for and on behalf of Bland Baker

Chartered Accountants and

Registered Auditor

21 Lodge Lane

Grays

Essex

RM17 5RY

16 July 2020

TURNOVER

3

81,987,983

75,739,917

Cost of sales

79,449,707

73,008,993

GROSS PROFIT

2,538,276

2,730,924

Administrative expenses

2,062,720

2,028,070

475,556

702,854

Other operating income

4

17,821

21,340

OPERATING PROFIT

6

493,377

724,194

Income from fixed asset investments

2,176

2,328

Interest receivable and similar income

2,055

1,333

4,231

3,661

497,608

727,855

Gain/loss on revaluation of investments

(20,397

)

(9,212

)

PROFIT BEFORE TAXATION

477,211

718,643

Tax on profit

7

93,237

139,457

PROFIT FOR THE FINANCIAL YEAR

383,974

579,186

Retained earnings at beginning of year

5,062,207

4,673,721

Dividends on equity shares

8

(65,000

)

(190,700

)

RETAINED EARNINGS AT END OF YEAR

5,381,181

5,062,207

FIXED ASSETS

Tangible assets

9

1,973,238

1,955,672

Investments

10

1,348

1,348

1,974,586

1,957,020

CURRENT ASSETS

Stocks

11

11,050,473

9,427,231

Debtors

12

2,205,584

1,507,786

Investments

13

44,583

64,980

Cash in hand

696,723

810,229

13,997,363

11,810,226

CREDITORS

Amounts falling due within one year

14

10,333,468

8,438,139

NET CURRENT ASSETS

3,663,895

3,372,087

TOTAL ASSETS LESS CURRENT LIABILITIES

5,638,481

5,329,107

PROVISIONS FOR LIABILITIES

18

31,500

41,100

NET ASSETS

5,606,981

5,288,007

CAPITAL AND RESERVES

Called up share capital

19

6,666

6,666

Share premium

20

290

290

Revaluation reserve - fixed

assets

20

215,511

215,511

Capital redemption reserve

20

3,333

3,333

Retained earnings

20

5,381,181

5,062,207

SHAREHOLDERS' FUNDS

5,606,981

5,288,007

The financial statements were approved by the Board of Directors and authorised for issue on 15 July 2020 and were signed on its behalf by:

C.J. Rate - Director

Cash flows from operating activities

Cash generated from operations

1

750,226

564,124

Tax paid

(141,687

)

(90,857

)

Net cash from operating activities

608,539

473,267

Cash flows from investing activities

Purchase of tangible fixed assets

(251,633

)

(320,760

)

Sale of tangible fixed assets

41,427

107,162

Sale of fixed asset investments

(49

)

5,000

Interest received

2,055

1,333

Dividends received

2,176

2,328

Net cash from investing activities

(206,024

)

(204,937

)

Cash flows from financing activities

New loans in year

260,214

368,223

Loan repayments in year

(609,040

)

-

Amount introduced by directors

-

86,116

Amount withdrawn by directors

(102,195

)

-

Equity dividends paid

(65,000

)

(188,700

)

Net cash from financing activities

(516,021

)

265,639

(Decrease)/increase in cash and cash equivalents

(113,506

)

533,969

Cash and cash equivalents at beginning of year

2

810,229

276,260

Cash and cash equivalents at end of year

2

696,723

810,229

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

2019

2018

£

£

Profit before taxation

477,211

718,643

Depreciation charges

176,124

170,787

Loss/(profit) on disposal of fixed assets

16,565

(11,981

)

Loss on revaluation of fixed assets

20,397

9,212

Finance income

(4,231

)

(3,661

)

686,066

883,000

Increase in stocks

(1,623,242

)

(2,431,511

)

(Increase)/decrease in trade and other debtors

(663,730

)

309,465

Increase in trade and other creditors

2,351,132

1,803,170

Cash generated from operations

750,226

564,124

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 December 2019

31.12.19

1.1.19

£

£

Cash and cash equivalents

696,723

810,229

Year ended 31 December 2018

31.12.18

1.1.18

£

£

Cash and cash equivalents

810,229

276,260

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.1.19

Cash flow

At 31.12.19

£

£

£

Net cash

Cash at bank and in hand

810,229

(113,506

)

696,723

810,229

(113,506

)

696,723

Liquid resources

Current asset investments

64,980

(20,397

)

44,583

64,980

(20,397

)

44,583

Debt

Debts falling due within 1 year

(609,040

)

348,826

(260,214

)

(609,040

)

348,826

(260,214

)

Total

266,169

214,923

481,092

1.	STATUTORY INFORMATION

R.T. Rate Limited 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.

The presentation currency of the financial statements is the Pound 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 as modified by the revaluation of certain assets.

Turnover

Turnover represents net invoiced sale of goods and work done, excluding value added tax together

with commissions receivable and rental income receivable in respect of operating leases.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Freehold property

-

2% on cost

Plant and machinery

-

at variable rates on reducing balance

Motor vehicles

-

25% on reducing balance

Motor vehicle depreciation is in respect of assets leased to customers.

Stocks

Stocks are valued at the lower of cost and net realisable value after making due allowance for obsolete

and slow moving items.

The directors consider that consignment stocks of new vehicles held by the company on behalf of the

Ford Motor Company, meet the criteria of Financial Reporting Standard 102 to be recognised as

assets. Accordingly, such new vehicles are shown as stock in the accounts with a corresponding

liability being shown within creditors falling due within one year.

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 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 for the year are

charged to the profit and loss account.

Current asset investments

Current asset investments are stated at their mid-price at the statement of financial position date.

Surpluses or deficits are recognised in the statement of comprehensive income.

Vehicles leased to customers

Vehicles leased to customers are included in fixed assets and depreciated in accordance with the

policy stated above. Operating lease income is accounted for on a straight line basis and is included

within the comprehensive income statement when receivable.

3.

TURNOVER

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

Turnover includes operating lease income totalling £27,308 (2018 - £31,812).

4.	OTHER OPERATING INCOME

2019

2018

£

£

Rents received

11,000

11,000

Management charge income

6,821

10,340

17,821

21,340

5.	EMPLOYEES AND DIRECTORS

2019

2018

£

£

Wages and salaries

2,971,418

2,893,608

Social security costs

341,997

339,483

Other pension costs

84,899

78,410

3,398,314

3,311,501

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

2019

2018

Sales

26

28

Operatives

27

23

Administrative

26

25

Directors

5

5

84

81

2019

2018

£

£

Directors' remuneration

412,493

533,373

Directors' pension contributions to money purchase schemes

22,025

22,025

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

Money purchase schemes

5

5

Information regarding the highest paid director is as follows:

2019

2018

£

£

Emoluments etc

135,129

184,496

Pension contributions to money purchase schemes

8,241

8,241

6.	OPERATING PROFIT

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

2019

2018

£

£

Operating lease income

(27,308

)

(31,812

)

Depreciation - owned assets

176,124

170,788

Loss/(profit) on disposal of fixed assets

16,565

(11,981

)

Auditors' remuneration

21,000

21,000

Other non- audit services

20,500

14,500

Operating leases - land and buildings

198,377

181,715