Wilsons Automobiles & Coachworks Limited - Limited company accounts 20.1

WILSONS AUTOMOBILES AND COACHWORKS LIMITED - Company Information

IRIS Accounts Productionv20.3.4.100272743Board of Directors31.12.191.1.1931.12.1931.12.19falseFair value modelOrdinary0 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REGISTERED NUMBER: 00272743 (England and Wales)

Group Strategic Report, Report of the Directors and

Consolidated Financial Statements

for the Year Ended 31st December 2019

for

WILSONS AUTOMOBILES AND COACHWORKS

LIMITED

Page

Company Information

Group Strategic Report

Report of the Directors

Statement of Directors' Responsibilities

Report of the Independent Auditors

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Company Statement of Financial Position

Consolidated Statement of Changes in Equity

Company Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Consolidated Statement of Cash Flows

Notes to the Consolidated Financial Statements

DIRECTORS:

I A Wilson

Ms T Wilson

Ms M Wilson

Mrs T Wilson

Mrs G Storr

J Butler

D M Wheatcroft

W Gumienny

SECRETARY:

Mrs T Wilson

REGISTERED OFFICE:

Nonsuch Business Park

Kiln Lane

Epsom

Surrey

KT17 1BH

REGISTERED NUMBER:

00272743 (England and Wales)

AUDITORS:

Simpson Wreford & Partners

Chartered Accountants

Registered Auditors

Suffolk House

George Street

Croydon CR0 0YN

The directors present their strategic report of the company and the group for the year ended 31st December 2019.

REVIEW OF BUSINESS

Despite the year-on-year decline in the sales of new vehicles across the UK, the group report an increase in turnover to £129m in the year, up from £119m in 2018. However, due to rising vehicle purchase costs, materials, parts, and other direct costs, and also the increase in competition in the UK new and used vehicle markets, the group reports a fall in gross profit margin to 16.0% in the year, down from 16.6% in 2018.

Despite these challenges, the group report profit before tax for the year of £1,011,298 (2018: £860,063), and a net asset position at the balance sheet date of £27,104,975 (2018: £26,338,232).

PRINCIPAL RISKS AND UNCERTAINTIES

The main risks and uncertainties associated with the group's operations are set out below:

Financial instrument risks

The group's financial instruments comprise cash, cash equivalents and bank borrowings, and risks here include interest rate risk, credit risk and to a lesser extent liquidity risk.

General economic conditions

The group's performance is influenced by general economic conditions, consumer confidence and credit availability. Restriction on the availability of retail credit could adversely affect the group's performance. Consumer confidence in the UK remains fragile as a result of wider economic conditions and therefore discretionary expenditure may be reduced by many customers, which would impact on the number and type of vehicles that will be sold in the year.

Uncertainty regarding the UK's trade with the European Union following Brexit will also impact on consumers decision making.

Manufacturers

The group operates under a number of franchise agreements with automotive manufacturers and, to some extent, manufacturers exercise a degree of control over the operations of the group's franchises. Our franchise agreements could be terminated or not renewed for a variety of reasons. The success of individual franchises is also dependent on the reputation of the various manufacturers, particularly in relation marketing, design and build quality of their products. Significant deterioration in the reputation of any of the major manufacturers may have an impact on the performance of the group. Brexit also causes uncertainty regarding the trading relationships on which the group depends for the majority of the products it sells.

The directors believe the group is as well placed as any in the industry to deal with these risks and uncertainties.

SECTION 172(1) STATEMENT

The directors are aware of their duties under section 172 of the Companies Act 2006 to run the company and group for the benefit of its shareholders, and in doing so are mindful of the long-term impact of their actions on the group's stakeholders. The interests of these stakeholders have been considered in detail in enacting the decisions highlighted in this report. The group continues to deliver exceptional standards of service that demonstrates its commitment to long term performance, while the proactive measures it has taken to guard against the negative impact of Covid-19 have prioritised the evolving needs of its customers, suppliers and employees.

GOING CONCERN AND FUTURE DEVELOPMENTS

Since March 2020, the directors have constantly assessed the impact of the coronavirus pandemic (COVID-19) on the group, its cash inflow, cash reserves, customers and employees. The group meet its working capital requirements through retained profit and financing from its bankers, and has utilised the various support mechanisms instigated by the UK government.

The directors conclude that the COVID-19 pandemic had an immediate impact on the group's operations, with the group's dealership closed during the period of the UK government enforced lockdown. Since reopening in June 2020 with strict health and safety guidelines in place, the directors report an increase in the like-for-like vehicle sales for the period.

The group have maintained a strong relationship with its bankers, and have improved their stock management, both key to maintaining cash reserves.

In light of the above the directors are confident the group will be able to continue to meet its liabilities as they fall due, for at least 12 months from the date these financial statements were authorised for issue. As a result, the directors believe it is appropriate to adopt the going concern basis of accounting in preparing the financial statements.

ON BEHALF OF THE BOARD:

J Butler - Director

23rd September 2020

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

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of trading in the servicing, hiring and sales of motor vehicles.

DIVIDENDS

The directors do not recommend payment of a final dividend.

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

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

I A Wilson

Ms T Wilson

Ms M Wilson

Mrs T Wilson

Mrs G Storr

J Butler

D M Wheatcroft

W Gumienny

DISCLOSURE IN THE STRATEGIC REPORT

The principal risks and uncertainties facing the group have been considered in the strategic report.

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 group'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 group's auditors are aware of that information.

AUDITORS

The auditors, Simpson Wreford & Partners, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

J Butler - Director

23rd September 2020

The directors are responsible for preparing the Group 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 the group and of the profit or loss of the group 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Opinion

We have audited the financial statements of Wilsons Automobiles and Coachworks Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31st December 2019 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Company Statement of Financial Position, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Statement of Cash Flows and Notes to the Consolidated 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 group's and of the parent company affairs as at 31st December 2019 and of the group's 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 group 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 group'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 Group Strategic Report, the Report of the Directors and the Statement of Directors' Responsibilities, 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 Group 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 Group 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 group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company 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 five, 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 group's and the parent 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 group or the parent 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.

Tim Lindfield (Senior Statutory Auditor)

for and on behalf of Simpson Wreford & Partners

Chartered Accountants

Registered Auditors

Suffolk House

George Street

Croydon CR0 0YN

9th December 2020

REVENUE

129,246,903

119,269,845

Cost of sales

108,561,978

99,509,599

GROSS PROFIT

20,684,925

19,760,246

Administrative expenses

19,633,687

19,171,815

1,051,238

588,431

Other operating income

323,156

OPERATING PROFIT

1,051,238

911,587

Interest payable and similar expenses

39,940

51,524

PROFIT BEFORE TAXATION

1,011,298

860,063

Tax on profit

244,555

232,730

PROFIT FOR THE FINANCIAL YEAR

766,743

627,333

OTHER COMPREHENSIVE INCOME

Excess depreciation on revalued amounts

38,642

Revaluation

Transfer to revaluation reserve

(38,642

)

(38,642

)

Income tax relating to components of other

comprehensive income

OTHER COMPREHENSIVE INCOME FOR THE

YEAR, NET OF INCOME TAX

TOTAL COMPREHENSIVE INCOME FOR THE

YEAR

766,743

627,333

Profit attributable to:

Owners of the parent

766,743

627,333

Total comprehensive income attributable to:

Owners of the parent

766,743

627,333

FIXED ASSETS

Property, plant and equipment

14,527,534

14,927,528

Investments

58,848

Investment property

705,889

15,292,271

15,692,265

CURRENT ASSETS

Inventories

29,236,347

24,997,851

Debtors

2,257,155

2,435,228

Cash at bank and in hand

5,442

10,504

31,498,944

27,443,583

CREDITORS

Amounts falling due within one year

18,496,420

15,435,734

NET CURRENT ASSETS

13,002,524

12,007,849

TOTAL ASSETS LESS CURRENT LIABILITIES

28,294,795

27,700,114

CREDITORS

Amounts falling due after more than one

year

(756,000

)

(868,000

)

PROVISIONS FOR LIABILITIES

(433,820

)

(493,882

)

NET ASSETS

27,104,975

26,338,232

CAPITAL AND RESERVES

Called up share capital

164,100

Share premium

1,787,974

Revaluation reserve

2,998,778

3,037,240

Capital redemption reserve

105,370

Retained earnings

22,048,753

21,243,548

SHAREHOLDERS' FUNDS

27,104,975

26,338,232

The financial statements were approved by the Board of Directors and authorised for issue on 23rd September 2020 and were signed on its behalf by:

J Butler - Director

FIXED ASSETS

Property, plant and equipment

14,527,535

14,927,529

Investments

159,048

Investment property

14,686,583

15,086,577

CURRENT ASSETS

Inventories

29,236,347

24,997,851

Debtors

2,963,044

3,141,117

Cash at bank

5,342

10,404

32,204,733

28,149,372

CREDITORS

Amounts falling due within one year

18,596,521

15,535,832

NET CURRENT ASSETS

13,608,212

12,613,540

TOTAL ASSETS LESS CURRENT LIABILITIES

28,294,795

27,700,117

CREDITORS

Amounts falling due after more than one

year

(756,000

)

(868,000

)

PROVISIONS FOR LIABILITIES

(433,820

)

(493,882

)

NET ASSETS

27,104,975

26,338,235

CAPITAL AND RESERVES

Called up share capital

164,100

Share premium

1,787,974

Revaluation reserve

2,998,778

3,037,240

Capital redemption reserve

105,370

Retained earnings

22,048,753

21,243,551

SHAREHOLDERS' FUNDS

27,104,975

26,338,235

Company's profit for the financial year

766,740

627,333

The financial statements were approved by the Board of Directors and authorised for issue on 23rd September 2020 and were signed on its behalf by:

J Butler - Director

Called up

Retained

capital

earnings

premium

Balance at 1st January 2018

164,100

20,577,753

1,787,974

Changes in equity

Total comprehensive income

665,795

Balance at 31st December 2018

164,100

21,243,548

1,787,974

Changes in equity

Total comprehensive income

805,205

Balance at 31st December 2019

164,100

22,048,753

1,787,974

Capital

Revaluation

redemption

Total

reserve

equity

Balance at 1st January 2018

3,075,702

105,370

25,710,899

Changes in equity

Total comprehensive income

(38,462

)

627,333

Balance at 31st December 2018

3,037,240

105,370

26,338,232

Changes in equity

Total comprehensive income

(38,462

)

766,743

Balance at 31st December 2019

2,998,778

105,370

27,104,975

Called up

Retained

capital

earnings

premium

Balance at 1st January 2018

164,100

20,577,756

1,787,974

Changes in equity

Total comprehensive income

665,795

Balance at 31st December 2018

164,100

21,243,551

1,787,974

Changes in equity

Total comprehensive income

805,202

Balance at 31st December 2019

164,100

22,048,753

1,787,974

Capital

Revaluation

redemption

Total

reserve

equity

Balance at 1st January 2018

3,075,702

105,370

25,710,902

Changes in equity

Total comprehensive income

(38,462

)

627,333

Balance at 31st December 2018

3,037,240

105,370

26,338,235

Changes in equity

Total comprehensive income

(38,462

)

766,740

Balance at 31st December 2019

2,998,778

105,370

27,104,975

Cash flows from operating activities

Cash generated from operations

1,509,914

319,243

Interest paid

(39,940

)

(51,524

)

Tax paid

2,834

(310,829

)

Net cash from operating activities

1,472,808

(43,110

)

Cash flows from investing activities

Purchase of tangible fixed assets

(349,122

)

(829,772

)

Sale of tangible fixed assets

2,295

Net cash from investing activities

(346,827

)

(829,772

)

Cash flows from financing activities

Loan repayments in year

(112,000

)

(112,000

)

Other Loan repayments in the year

(250,000

)

Amount introduced by directors

1,838

1,824,381

Amount withdrawn by directors

(660,559

)

(936

)

Net cash from financing activities

(770,721

)

1,461,445

Increase in cash and cash equivalents

355,260

588,563

Cash and cash equivalents at beginning of

year

(739,610

)

(1,328,173

)

Cash and cash equivalents at end of year

(384,350

)

(739,610

)

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

2019

2018

Profit before taxation

1,011,298

860,063

Depreciation charges

746,821

562,791

Finance costs

39,940

51,524

1,798,059

1,474,378

(Increase)/decrease in inventories

(4,238,496

)

3,524,094

Decrease in trade and other debtors

33,116

1,148,775

Increase/(decrease) in trade and other creditors

3,917,235

(5,828,004

)

Cash generated from operations

1,509,914

319,243

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 31st December 2019

31.12.19

1.1.19

Cash and cash equivalents

5,442

10,504

Bank overdrafts

(389,792

)

(750,114

)

(384,350

)

(739,610

)

Year ended 31st December 2018

31.12.18

1.1.18

Cash and cash equivalents

10,504

3,281

Bank overdrafts

(750,114

)

(1,331,454

)

(739,610

)

(1,328,173

)

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

10,504

(5,062

)

5,442

Bank overdrafts

(750,114

)

360,322

(389,792

)

(739,610

)

355,260

(384,350

)

Debt

Debts falling due within 1 year

(122,000

)

(122,000

)

Debts falling due after 1 year

(868,000

)

112,000

(756,000

)

(990,000

)

112,000

(878,000

)

Total

(1,729,610

)

467,260

(1,262,350

)

1.	STATUTORY INFORMATION

The principal activity of the company continued to be that of the sale or new cars and light motor vehicles and the sale of used cars and light motor vehicles.

The company is a private company limited by shares and is registered in England and Wales. The address of its registered office is Nonsuch Business Park, Kiln Lane, Epsom Surrey, KT17 1DH.

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.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the group's accounting policies (see note 3).

Going Concern

Following the period end, the Covid-19 pandemic has resulted in significant business and social disruption around the world. The impact on the group has been immediate, with the dealership closed during the period of the UK government enforced lockdown. The directors are continually reviewing and updating the group's strategy to lessen the impact of the pandemic on the group's operations and believe that this, along with the fact that the group's dealership is now open for trade, will allow the group to meet its liabilities as they fall due for a period of at least 12 months from the date the financial statements were authorised for issue. Accordingly, the directors are satisfied that the financial statements should be prepared on the going concern basis.

Basis of consolidation

The consolidated financial statements present the results of Wilsons Automobiles and Coachworks Limited and its dormant subsidiary undertakings up to 31 December each year. Intercompany transactions and balances between group companies are therefore eliminated in full.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities

The consolidated financial statements incorporate the results of business combinations using the purchase method.

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.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services.

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:

the group has transferred the significant risks and rewards of ownership to the buyer;

the group 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 group will receive the consideration due under the transaction;

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

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided, when all of the following conditions are satisfied:

the amount of revenue can be measured reliably;

it is probable that the group will receive the consideration due under the contract;

the stage of completion of the contract at the end of the reporting period can be measured reliably, and;

the costs incurred and the costs to complete the contract can be measured reliably.

Manufacturer bonuses and commission income

Manufacturer bonuses are considered to be a reduction in the cost of the vehicles sold, and hence are credited against cost of sales in the income statement. Commissions receivable for arranging vehicle financing are included in turnover.

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost included expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

At each reporting date the group assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on the following basis:

Freehold property

- 2% on cost

Short leasehold

- over length of lease

Long leasehold

- over length of lease

Plant and machinery

- 20% on cost

Computer equipment

- 33% on cost

Gains and losses on disposals are determined by comparing the proceeds with the carrying amounts and are recognised in the Statement of Comprehensive Income.

Investment property

Investment property is shown at most recent valuation. Any aggregate surplus or deficit arising from changes in fair value is recognised in profit or loss.

Stocks

Motor vehicles are included at the lower of cost plus the cost of preparation and repairs to date and their estimated selling price less costs to sell. Cost is net of incentives received from manufacturers in respect of target achievements. Fair values are assessed using market research data which is based upon recent industry activity.

Parts, accessories, petrol and lubricants are included at the lower of cost and their estimated selling price less costs to sell, after making allowance for obsolete and slow moving items.

The rental fleet and demonstration vehicles are valued at cost less a write down of 2% per month which writes off the cost over the estimated life of the vehicle.

Consignment vehicles are regarded as being effectively under the control of the company and are included within stock on the balance sheet as the company has the significant risks and rewards of ownership even though legal title has not yet passed. The corresponding liability is included in trade creditors.

At each reporting date, stocks are assessed for impairment. Where necessary, the carrying amount is reduced to its selling price less costs to complete and sell. Impairment losses are recognised immediately in profit or loss.

Financial instruments

The group enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities such as trade and other debtors and creditors, loans from financial institutions and loans to and from related parties.

Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transactions, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an out-right short-term loan not at market value, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the group would receive for the asset if it were to be sold at the balance sheet date.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated 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.

Hire purchase and leasing commitments

Rentals payable under operating leases are charges against income on a straight line basis over the lease term.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

The pension costs charged in the financial statements represent the contribution payable by the group during the year.

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.

Investments

Fixed asset investments are stated at cost less provision for diminution in value.

Current asset investments are at the lower of cost and their estimated selling price less costs to sell.

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.

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.

3.	CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In applying the group's accounting policies, the directors are required to make judgements, estimated and assumptions in determining the carrying value of assets and liabilities. The directors' judgement, estimates and assumptions are based on the best and most reliable evidence at the time when the decisions are made and are based on historical experience and other factors that are considered to be applicable. Due to the inherent sensitivity involved in making judgements, estimates and assumptions, the actual results and outcomes may differ.

The estimates and underlying assumptions are reviewed on an ongoing basis. Any revisions to accounting estimates are recognised prospectively.

In assessing whether there have been any indicators of impairment to assets, the directors consider both external and internal sources of information such as market conditions and experience of recoverability and establishes a provision for receivables that are estimated not to be recoverable.

Consignment stock

Consignment vehicles have been included in stock on the basis that the company has determined that it holds the significant risks and rewards attached to them.

Product warranty provision

The product warranty provision requires an estimation of the number of expected warranty claims and the expected cost of labour and parts necessary to satisfy them.

Incentives and other rebates from brand partners

The company receives income in the form of various incentives which are determined by the brand partners. The amount received is generally based on achieving specific sales volume, as well as other objectives including maintaining brand partner standards which may include retail centre image and design requirements, customer satisfaction survey results and trading standards. Objectives are generally set and measured on either a quarterly or annual basis.

Where incentives are based on specific sales volume or number of registrations, the related income is recognised as a reduction in cost of sales when it is reasonably certain that the income has been earned. This is generally the later of the date the vehicles are sold or registered or when it is reasonably certain that the related target will be met. Where incentives are linked to retail centre image and design requirement, customer satisfaction survey results or trading standards, they are recognised as a reduction in cost of sales when it is reasonably certain that the incentive will be received for the relevant period.

The company may also receive contributions towards advertising and promotional expenditure. Where such contributions are received they are recognised as a reduction in the related expenditure in the period to which they relate.

Provisions against slow moving inventory

The group establishes a provision for slow moving inventory. When determining the provision, the directors consider factors such as the amount of the inventory holding and subsequent sales.

Determining residual values and useful economic lives of property, plant and equipment

The group depreciated tangible assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management. The actual lives of these assets can vary depending on a variety of factors, including technical innovation, product life cycles and maintenance programmes.

REVENUE

The total turnover of the group for the year has been derived from its principal activity wholly undertaken in the UK.

5.	EMPLOYEES AND DIRECTORS

2019

2018

Wages and salaries

9,264,109

8,825,441

Social security costs

947,523

906,155

Other pension costs

198,832

142,960

10,410,464

9,874,556

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

2019

2018

Directors

Service

116

106

Selling

Administration

235

221

The average number of employees by undertakings that were proportionately consolidated during the year was 235 (2018 - 221 ) .

The company operates a defined contribution pension scheme in respect of certain directors and staff. The scheme and its assets are held by independent managers.

2019

2018

Directors' remuneration

1,395,634

1,521,616

Directors' pension contributions to money purchase schemes

47,809

94,454

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

Money purchase schemes

Information regarding the highest paid director is as follows:

2019

2018

Emoluments etc

228,012

278,518

Pension contributions to money purchase schemes

16,917

72,685

6.	OPERATING PROFIT

The operating profit is stated after charging:

2019

2018

Other operating leases

557,626

582,115

Depreciation - owned assets

746,821

562,790

Auditors' remuneration

31,500

30,000

Auditors' remuneration for non audit work

10,750

7,100

INTEREST PAYABLE AND SIMILAR EXPENSES

2019

2018

On bank loans and overdrafts

39,940

51,524

TAXATION

Analysis of the tax charge

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

2019

2018

Current tax:

UK corporation tax

304,617

262,835

Deferred tax

(60,062

)

(30,105

)

Tax on profit

244,555

232,730

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:

2019

2018

Profit before tax

1,011,298

860,063

Profit multiplied by the standard rate of corporation tax in the UK of 19 %

(2018 - 19 %)

192,147

163,412

Effects of:

Expenses not deductible for tax purposes

2,560

14,952

Depreciation in excess of capital allowances

123,590

70,791

Deferred tax

(60,062

)

(30,105

)

Adjustment for pension accrual

(13,680

)

13,680

Total tax charge

244,555

232,730

Tax effects relating to effects of other comprehensive income

2019

Gross

Tax

Net

Excess depreciation on revalued amounts

38,642

Revaluation

Transfer to revaluation reserve

(38,642

)

(38,642

)

2018

Gross

Tax

Net

Excess depreciation on revalued amounts

38,642

Revaluation

Transfer to revaluation reserve

(38,642

)

(38,642

)

9.	INDIVIDUAL STATEMENT OF COMPREHENSIVE INCOME

As permitted by Section 408 of the Companies Act 2006, the Statement of Comprehensive Income of the parent company is not presented as part of these financial statements.

10.	PROPERTY, PLANT AND EQUIPMENT

Group

Freehold

Short

Long

property

leasehold

COST

At 1st January 2019

4,305,317

1,054,688

11,631,378

Additions

303,353

Disposals

(2,295

)

At 31st December 2019

4,305,317

1,054,688

11,932,436

DEPRECIATION

At 1st January 2019

250,678

739,474

1,358,134

Charge for year

97,734

37,381

487,782

Eliminated on disposal

At 31st December 2019

348,412

776,855

1,845,916

NET BOOK VALUE

At 31st December 2019

3,956,905

277,833

10,086,520

At 31st December 2018

4,054,639

315,214

10,273,244

Plant and

Computer

machinery

equipment

Totals

COST

At 1st January 2019

2,140,855

260,602

19,392,840

Additions

45,769

349,122

Disposals

(18,823

)

(21,118

)

At 31st December 2019

2,167,801

260,602

19,720,844

DEPRECIATION

At 1st January 2019

1,862,718

254,308

4,465,312

Charge for year

117,721

6,203

746,821

Eliminated on disposal

(18,823

)

(18,823

)

At 31st December 2019

1,961,616

260,511

5,193,310

NET BOOK VALUE

At 31st December 2019

206,185

14,527,534

At 31st December 2018

278,137

6,294

14,927,528

Company

Freehold

Short

Long

property

leasehold

COST

At 1st January 2019

4,305,318

1,054,688

11,631,378

Additions

303,353

Disposals

(2,295

)

At 31st December 2019

4,305,318

1,054,688

11,932,436

DEPRECIATION

At 1st January 2019

250,678

739,474

1,358,134

Charge for year

97,734

37,381

487,782

Eliminated on disposal

At 31st December 2019

348,412

776,855

1,845,916

NET BOOK VALUE

At 31st December 2019

3,956,906

277,833

10,086,520

At 31st December 2018

4,054,640

315,214

10,273,244

Plant and

Computer

machinery

equipment

Totals

COST

At 1st January 2019

2,140,855

260,602

19,392,841

Additions

45,769

349,122

Disposals

(18,823

)

(21,118

)

At 31st December 2019

2,167,801

260,602

19,720,845

DEPRECIATION

At 1st January 2019

1,862,718

254,308

4,465,312

Charge for year

117,721

6,203

746,821

Eliminated on disposal

(18,823

)

(18,823

)

At 31st December 2019

1,961,616

260,511

5,193,310

NET BOOK VALUE

At 31st December 2019

206,185

14,527,535

At 31st December 2018

278,137

6,294

14,927,529

11.	FIXED ASSET INVESTMENTS

Group

Unlisted

investments

COST

At 1st January 2019

and 31st December 2019

58,848

NET BOOK VALUE

At 31st December 2019

58,848

At 31st December 2018

58,848

Company

Shares in

group

Unlisted

undertakings

investments

Totals

COST

At 1st January 2019

and 31st December 2019

100,200

58,848

159,048

NET BOOK VALUE

At 31st December 2019

100,200

58,848

159,048

At 31st December 2018

100,200

58,848

159,048

Subsidiary undertakings

The following were subsidiary undertakings of the company:

Name

Country of Incorporation

Class of Shares

Holding

Wilsons (Automobiles) Ltd *

England & Wales

Ordinary

100%

Eurocars (Epsom) Limited **

England & Wales

Ordinary

100%

Wilsons (Epsom) Ltd *

England & Wales

Ordinary

100%

Registered office

- Nonsuch Business Park, Kiln Lane, East Street, Epsom, Surrey, KT17 1DH

- 3rd Floor, Suffolk House, George Street, Croydon, CR0 0YN

12.	INVESTMENT PROPERTY

Group

Total

FAIR VALUE

At 1st January 2019

and 31st December 2019

705,889

NET BOOK VALUE

At 31st December 2019

705,889

At 31st December 2018

705,889

Investment property was formally revalued in 2014. Having undertaken more recent valuations on other commercial properties held within the group, the directors do not feel that the value of the property at the year end differs materially from the figure stated at this time.

13.

STOCKS

Group

Company

2019

2018

2019

2018

Motor vehicles & parts for re- sale

29,236,347

24,997,851

29,236,347

24,997,851

14.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group

Company

2019

2018

2019

2018

Trade debtors

635,836

744,848

635,836

744,848

Amounts owed by group undertakings

705,889

Other debtors

327,886

297,654

327,886

297,654

Directors' current accounts

1,838

Tax

143,119

Prepayments and accrued income

1,293,433

1,247,769

1,293,433

1,247,769

2,257,155

2,435,228

2,963,044

3,141,117

15.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group

Company

2019

2018

2019

2018

Bank loans and overdrafts (see note 17)

501,792

862,114

501,892

862,214

Other loans (see note 17)

10,000

Trade creditors

13,674,903

10,447,484

13,674,904

10,447,482

Amounts owed to group undertakings

100,000

Tax

164,332

Social security and other taxes

78,586

31,956

78,586

31,956

Other creditors

170,478

190,331

170,478

190,331

Directors' current accounts

1,357,256

2,017,815

1,357,256

2,017,815

Accruals and deferred income

2,539,073

1,876,034

2,539,073

1,876,034

18,496,420

15,435,734

18,596,521

15,535,832

16.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Group

Company

2019

2018

2019

2018

Bank loans (see note 17)

756,000

868,000

756,000

868,000

17.

LOANS

An analysis of the maturity of loans is given below:

Group

Company

2019

2018

2019

2018

Amounts falling due within one year or on

demand:

Bank overdrafts

389,792

750,114

389,892

750,214

Bank loans

112,000

Other loans

10,000

511,792

872,114

511,892

872,214

Amounts falling due between one and two

years:

Bank loans - 1-2 years

112,000

Amounts falling due between two and five

years:

Bank loans - 2-5 years

644,000

756,000

644,000

756,000

18.	LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Group

Non-cancellable operating

leases

2019

2018

Within one year

299,490

314,906

Between one and five years

1,174,210

1,181,710

In more than five years

9,114,021

9,284,021

10,587,721

10,780,637

Company

Non-cancellable operating

leases

2019

2018

Within one year

299,490

314,907

Between one and five years

1,174,210

1,181,710

In more than five years

9,114,021

9,284,021

10,587,721

10,780,638

19.	SECURED DEBTS

The following secured debts are included within creditors:

Group

Company

2019

2018

2019

2018

Bank overdrafts

389,792

750,114

389,892

750,214

Other loans

10,000

399,792

760,114

399,892

760,214

The bank overdraft is secured by a first legal charge on the company's freehold and leasehold property at Kiln Lane, Epsom, Surrey and by a debenture creating a fixed and floating charge over all present and future assets.

The bank loans are repayable in instalments over 5 years.

The other loans are secured by way of a debenture creating a fixed and floating charge over all assets and undertakings of the company with priority over used vehicle stock to £2,000,000.

20.	FINANCIAL INSTRUMENTS

For Group and Company

31.12.19

31.12.18

Financial assets

Financial assets measured at fair value through profit or loss

5,342

10,404

Financial assets that are debt instruments measured at amortised cost

2,435,680

2,583,400

Financial liabilities

Financial liabilities measured at amortised cost

16,919,663

13,396,061

Financial assets measured at fair value through profit or loss comprise cash and bank in hand.

Financial assets are measured at amortised cost comprise trade and other debtors as well as items of accrued income included in prepayments.

Financial liabilities measured at amortised cost comprise trade creditors, bank and other loans and accruals where a cash settlement will take place.

21.	PROVISIONS FOR LIABILITIES

Group

Company

2019

2018

2019

2018

Deferred tax

Other timing differences

341,709

376,458

341,709

376,458

Accelerated tax depreciation

92,111

117,424

92,111

117,424

433,820

493,882

433,820

493,882

Group

Deferred

tax

Balance at 1st January 2019

493,882

Credit to Statement of Comprehensive Income during year

(60,062

)

Balance at 31st December 2019

433,820

Company

Deferred

tax

Balance at 1st January 2019

493,882

Credit to Statement of Comprehensive Income during year

(60,062

)

Balance at 31st December 2019

433,820

22.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2019

2018

value:

164,100

Ordinary

£1

164,100

23.

RESERVES

Group

Capital

Retained

Revaluation

redemption

earnings

premium

reserve

Totals

At 1st January 2019

21,243,548

1,787,974

3,037,240

105,370

26,174,132

Profit for the year

766,743

Transfer of realised profit

38,462

(38,462

)

At 31st December 2019

22,048,753

1,787,974

2,998,778

105,370

26,940,875

Company

Capital

Retained

Revaluation

redemption

earnings

premium

reserve

Totals

At 1st January 2019

21,243,551

1,787,974

3,037,240

105,370

26,174,135

Profit for the year

766,740

Transfer of realised profit

38,462

(38,462

)

At 31st December 2019

22,048,753

1,787,974

2,998,778

105,370

26,940,875

24.	DIRECTORS' ADVANCES, CREDITS AND GUARANTEES

Included in debtors and creditors is a net balance owed by the company to the directors of £1,357,256 (2018: £2,015,977).

There is no interest charged on the balances, which are repayable on demand.

25.	EVENTS AFTER THE REPORTING PERIOD

On 11 March 2020 the World Health Organisation recognised the outbreak of the coronavirus disease 2019 (Covid-19) as a pandemic. This resulted in government-imposed restrictions of movement and trade that has had a significant impact to business and economies worldwide. The directors have presented their consideration of the impact to the group in Note 2 of the financial statements and within the Report of the Directors. Whilst the directors believe that the group will be financially impacted by the pandemic, it is not possible to make a reasonable estimate of the financial effect due to the unprecedented nature of the event. As a result, the directors consider the pandemic to be a non-adjusting event after the reporting period.

26.	ULTIMATE CONTROLLING PARTY

Mr Ian Wilson and Mrs Teresa Wilson are the ultimate controlling parties of the company by virtue of holding the largest share holdings each.