Farmer and Carlisle Leicester Limited - Limited company accounts 20.1

REGISTERED NUMBER: 03101507 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

FOR

FARMER AND CARLISLE LEICESTER LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Statement of Comprehensive Income

8

Balance Sheet

9

Statement of Changes in Equity

10

Cash Flow Statement

11

Notes to the Cash Flow Statement

12

Notes to the Financial Statements

14

DIRECTORS:

J O Carlisle

P Freeman

C Noronha

SECRETARY:

M J Tongue

REGISTERED OFFICE:

29 Arboretum Street

Nottingham

Nottinghamshire

NG1 4JA

REGISTERED NUMBER:

03101507 (England and Wales)

AUDITORS:

Lemans

Statutory Auditor

29 Arboretum Street

Nottingham

Nottinghamshire

NG1 4JA

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

REVIEW OF BUSINESS

2019 saw a continued growth in demand for hybrid vehicles, especially with the new RAV4, CHR and Corolla models

coming to the market. The popularity of these models has led to demand outstripping supply which has led to the

company build up a strong order book. The used hybrid market has also continued to perform well during the year.

After sales continued to perform well and the company is also continuing to expand its trade parts business. This has led

to increased revenue from this sector of the business, and we see this continuing in the future.

The company sales and gross margin held up well and for the year amounted to £17,196,256 and £1,144,918

respectively (2018 - £17,811,765 and £1,073,096) and the directors are pleased with these results given the

strengthening of the company's order book.

Analysis of sales for the year is shown below:-

2019

2018

Increase / (decrease)

£

£

%

Sale of motor vehicles

12,775,116

13,534,833

(5.6

)

Sale of associated services

2,923,571

2,745,890

6.5

Commissions and discounts

1,497,569

1,531,042

(2.2

)

Overheads remain under tight control of the director and senior management team who are always seeking to impose the

control and efficiency of the company.

After taxation the profit for the year amounted to £294,521 (2018 - £239,705)

COVID-19

Unfortunately in March 2020 the government was forced to impose a complete lock down in the UK as part of the

measures introduced to deal with the Covid- 19 pandemic.This meant that the company had to cease trading for a

number of weeks and although the company re opened for business in early June, was forced into lock down again in

July due to increased infections in the Leicester area.

This obviously had a significant impact on trade during that period. However with government assistance being received

by way of the furlough scheme,business rate relief as well as manufacturers support and the strong order book, the

company has come out of lock down in a strong position.

PRINCIPAL RISKS AND UNCERTAINTIES

Competitive pressure in the retail motor sector and after sales is a continuing risk to the business which could result in

losing sales to revival franchise dealerships and none franchised garages. To manage this risk, the company and Toyota

continue to strongly promote the vehicle range especially in the 'hybrid sector' where it is seen as a market leader. This

combined with the continuing subsidised interest free finance packages available should help retain sales volume, and

provide competitively priced economical vehicles to the private sector. At all times the company aims to provide an

excellent sales and after sales service to all its customers to maintain and promote customer loyalty.

The company has secured variable rate medium term loans which are susceptible to interest rate rises and where possible

the company seeks to mitigate this risk.

Whilst Covid -19 continues to be a risk to the general economic environment, the company has taken all necessary

measures to minimise the impact of a new Covid 19 spike.

ON BEHALF OF THE BOARD:

J O Carlisle - Director

11 September 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 the sale and maintenance of new and used

motor vehicles.

DIVIDENDS

The directors of the company do not recommend the payment of a dividend.

DIRECTORS

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

report.

J O Carlisle

P Freeman

C Noronha

RISKS AND UNCERTAINTIES

Continued competitive pressure within the UK economy combined with difficult trading conditions continue to be the

main risk facing the company. The company manages this risk by working closely with Toyota and focusing on customer

service.

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). 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 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, Lemans, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

J O Carlisle - Director

11 September 2020

Opinion

We have audited the financial statements of Farmer and Carlisle Leicester Limited (the 'company') for the year ended

31 December 2019 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 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.

Adrian Harby FCCA (Senior Statutory Auditor)

for and on behalf of Lemans

Statutory Auditor

29 Arboretum Street

Nottingham

Nottinghamshire

NG1 4JA

11 September 2020

TURNOVER

3

17,196,256

17,811,765

Cost of sales

16,051,338

16,738,669

GROSS PROFIT

1,144,918

1,073,096

Administrative expenses

760,783

769,006

OPERATING PROFIT

5

384,135

304,090

Interest receivable and similar income

17

2

384,152

304,092

Interest payable and similar expenses

6

17,780

21,986

PROFIT BEFORE TAXATION

366,372

282,106

Tax on profit

7

71,851

42,401

PROFIT FOR THE FINANCIAL YEAR

294,521

239,705

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

294,521

239,705

FIXED ASSETS

Tangible assets

8

3,872,267

3,927,155

CURRENT ASSETS

Stocks

9

1,763,735

1,271,642

Debtors

10

611,079

820,146

Cash at bank and in hand

1,019

895

2,375,833

2,092,683

CREDITORS

Amounts falling due within one year

11

3,401,699

3,287,676

NET CURRENT LIABILITIES

(1,025,866

)

(1,194,993

)

TOTAL ASSETS LESS CURRENT LIABILITIES

2,846,401

2,732,162

CREDITORS

Amounts falling due after more than one year

12

(520,000

)

(693,334

)

PROVISIONS FOR LIABILITIES

16

(7,727

)

(14,675

)

NET ASSETS

2,318,674

2,024,153

CAPITAL AND RESERVES

Called up share capital

17

85,000

85,000

Revaluation reserve

18

1,694,554

1,647,355

Capital redemption reserve

18

215,000

215,000

Retained earnings

18

324,120

76,798

SHAREHOLDERS' FUNDS

2,318,674

2,024,153

The financial statements were approved by the Board of Directors and authorised for issue on 11 September 2020 and were signed on its behalf by:

J O Carlisle - Director

Called up

Capital

share

Retained

Revaluation

redemption

Total

capital

earnings

reserve

reserve

equity

£

£

£

£

£

Balance at 1 January 2018

85,000

(182,325

)

1,666,773

215,000

1,784,448

Changes in equity

Total comprehensive income

-

259,123

(19,418

)

-

239,705

Balance at 31 December 2018

85,000

76,798

1,647,355

215,000

2,024,153

Changes in equity

Total comprehensive income

-

247,322

47,199

-

294,521

Balance at 31 December 2019

85,000

324,120

1,694,554

215,000

2,318,674

Cash flows from operating activities

Cash generated from operations

1

424,612

320,174

Interest paid

(17,780

)

(21,986

)

Tax paid

(63,516

)

(35,313

)

Net cash from operating activities

343,316

262,875

Cash flows from investing activities

Purchase of tangible fixed assets

(14,064

)

(9,026

)

Interest received

17

2

Net cash from investing activities

(14,047

)

(9,024

)

Cash flows from financing activities

Loan repayments in year

(298,335

)

(248,332

)

Capital repayments in year

(19,701

)

10,460

Net cash from financing activities

(318,036

)

(237,872

)

Increase in cash and cash equivalents

11,233

15,979

Cash and cash equivalents at beginning of year

2

(215,763

)

(231,742

)

Cash and cash equivalents at end of year

2

(204,530

)

(215,763

)

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

31.12.19

31.12.18

£

£

Profit before taxation

366,372

282,106

Depreciation charges

68,953

68,412

Loss on disposal of fixed assets

-

3,729

Finance costs

17,780

21,986

Finance income

(17

)

(2

)

453,088

376,231

Increase in stocks

(492,093

)

(41,192

)

Decrease/(increase) in trade and other debtors

209,067

(2,144

)

Increase/(decrease) in trade and other creditors

254,550

(12,721

)

Cash generated from operations

424,612

320,174

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 2019

31.12.19

1.1.19

£

£

Cash and cash equivalents

1,019

895

Bank overdrafts

(205,549

)

(216,658

)

(204,530

)

(215,763

)

Year ended 31 December 2018

31.12.18

1.1.18

£

£

Cash and cash equivalents

895

1,217

Bank overdrafts

(216,658

)

(232,959

)

(215,763

)

(231,742

)

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.1.19

Cash flow

At 31.12.19

£

£

£

Net cash

Cash at bank and in hand

895

124

1,019

Bank overdrafts

(216,658

)

11,109

(205,549

)

(215,763

)

11,233

(204,530

)

Debt

Finance leases

(19,701

)

19,701

-

Debts falling due within 1 year

(348,333

)

125,000

(223,333

)

Debts falling due after 1 year

(693,334

)

173,334

(520,000

)

(1,061,368

)

318,035

(743,333

)

Total

(1,277,131

)

329,268

(947,863

)

1.	STATUTORY INFORMATION

Farmer and Carlisle Leicester 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.

The accounts are prepared on a going concern basis which the directors consider to be justifiable as the company

has secured medium term borrowings to fund the redevelopment of its Welford Road site and are confident of

continued support from its bankers and other companies within the Farmer and Carlisle Group.

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.

Turnover

Revenue is recognised to the extent that is probable that the economic benefits will flow to the company and the

revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or

receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also

be met before revenue is recognised:

Sales of goods

Revenue from the sale of motor vehicles and associated services is recognised when all of the following

conditions are satisfied:

- the company has transferred the significant risks and rewards of ownership to the buyer, usually on the

despatch of goods;

- the company retains neither continuing managerial involvement to the degree usually associated with

ownership nor effective control over the goods sold;

- the amount of revenue can be measured reliably;

- it is probable that the company will receive the consideration due under the transaction;

- the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Tangible fixed assets

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

life or, if held under a finance lease, over the term, whichever is the shorter.

Freehold property - 2% on cost (excluding land)

Computer equipment - 25% on reducing balance

Fixtures and fittings - 20% on reducing balance and 5% on cost

Stocks

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

moving items.

Cost includes all costs incurred in bringing each product to its present location and condition which includes

invoice cost plus freight and duty. Stock is valued using a first in first out basis. Net realisable value is based on

estimated selling price less any further costs expected to be incurred to disposal.

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 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.

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.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet and are

depreciated over their estimated useful lives. The interest element of these obligations is charged to the profit and

loss account over the relevant period. The capital element of the future payments is treated as a liability.

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

Debtors and creditors receivable / payable

Debtors and creditors with no stated interest rate and receivable or payable with in one year are recorded at the

transaction price.

Any losses arising from impairment are recognised in the profit and loss account in other administrative

expenses.

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:

31.12.19

31.12.18

£

£

Sale of motor vehicles

12,775,116

13,534,833

Sale of associated services

2,923,571

2,745,890

Commissions and discounts

1,497,569

1,531,042

17,196,256

17,811,765

4.	EMPLOYEES AND DIRECTORS

31.12.19

31.12.18

£

£

Wages and salaries

1,524,098

1,473,754

Social security costs

134,600

155,625

Other pension costs

33,254

24,878

1,691,952

1,654,257

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

31.12.19

31.12.18

Sales

16

15

Workshop and stores

28

26

Administration

8

9

52

50

31.12.19

31.12.18

£

£

Directors' remuneration

205,982

212,248

Directors' pension contributions to money purchase schemes

4,477

4,255

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

Money purchase schemes

3

3

Information regarding the highest paid director is as follows:

31.12.19

31.12.18

£

£

Emoluments etc

96,425

84,407

Pension contributions to money purchase schemes

3,052

3,205

5.	OPERATING PROFIT

The operating profit is stated after charging:

31.12.19

31.12.18

£

£

Depreciation - owned assets

68,952

68,413

Loss on disposal of fixed assets

-

3,729

Auditors' remuneration

7,500

7,500

Operating lease rentals - other

18,477

18,477

Operating lease rentals - plant and machinery

50

50

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

31.12.19

31.12.18

£

£

Bank interest

2,311

3,052

Loan interest

15,469

18,934

17,780

21,986