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Registered number: 07173098
DAVID BROWN AUTOMOTIVE LIMITED
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE YEAR ENDED 31 OCTOBER 2019
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DAVID BROWN AUTOMOTIVE LIMITED
REGISTERED NUMBER: 07173098
BALANCE SHEET
AS AT 31 OCTOBER 2019
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Provisions for liabilities
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DAVID BROWN AUTOMOTIVE LIMITED
REGISTERED NUMBER: 07173098
BALANCE SHEET (CONTINUED)
AS AT 31 OCTOBER 2019
The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the profit and loss account in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 3 to 11 form part of these financial statements.
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DAVID BROWN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2019
The company is a private company limited by shares and is incorporated in England. The address of its registered office is Silverstone Buckingham Road, Silverstone, Towcester, NN12 8FU.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The following principal accounting policies have been applied:
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Going concern and Covid-19
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The directors keep the company's trading and financial position under constant review. Forecasts have been prepared that incorporate the impact of COVID-19 and funding that is expected to be made available. In addition, a significant shareholder has indicated his continued support of the company. On the basis of these forecasts, the directors believe that the company has the ability to fulfil its financial obligations for a period of at least twelve months from the date of these financial statements and therefore consider it appropriate to prepare the financial statements on a going concern basis.
Covid-19 had a major impact on the business from March 2020 onwards. The business closed its operations in Silverstone in March, in line with all of the UK automotive sector. Operations only resumed production with a gradual restart from August 2020. Protecting the health, safety and wellbeing of employees is the company’s primary concern. Silverstone operates with robust protocols and guidelines to ensure effective social distancing, hygiene and health monitoring, whilst enabling production to increase in line with recovering demand. The company constantly monitors the impact of Covid-19 and has in place a full responsive plan to meet any further issues associated with the pandemic.
Revenue represents the receipts from the development and design of luxury cars and associated spare parts exclusive of value added tax.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
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DAVID BROWN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2019
2.Accounting policies (continued)
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
At each reporting date the company 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.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Amortisation is provided on the following bases:
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DAVID BROWN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2019
2.Accounting policies (continued)
Tangible fixed assets are stated at historic purchase cost less accumulated depreciation. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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Short-term leasehold property
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first outbasis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, stocks are assessed for impairment. Where necessary, provision is made for slow moving, obsolete and defective stocks. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
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.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
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DAVID BROWN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2019
2.Accounting policies (continued)
Short term 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.
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance sheet.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
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Staff are employed through another company with the salary costs are recharged. The number of employees disclosed below, therefore only includes directors.
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The average monthly number of employees, including directors, during the year was 4 (2018 - 4).
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DAVID BROWN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2019
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At 1 November 2018 (as previously stated)
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At 1 November 2018 (as restated)
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At 1 November 2018 (as previously stated)
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At 1 November 2018 (as restated)
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At 31 October 2018 (as restated)
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DAVID BROWN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2019
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Short-term leasehold property
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At 1 November 2018 (as previously stated)
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At 1 November 2018 (as restated)
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At 1 November 2018 (as previously stated)
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At 1 November 2018 (as restated)
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Charge for the year on owned assets
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At 31 October 2018 (as restated)
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DAVID BROWN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2019
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Prepayments and accrued income
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Accruals and deferred income
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DAVID BROWN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2019
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Charged to profit or loss
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Allotted, called up and unpaid
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1 (2018 - 1) Ordinary share of £1.00
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Comparative figures have been restated due to the reclassification of development expenditure on cars from tangible fixed assets to intangible fixed assets. This reclassification has had no effect on net assets or reserves.
The correction of the error has had the following effect on the prior year accounts.
- Intangible fixed assets have increased by £711,404
- Tangible fixed assets have decreased by £711,404
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Commitments under operating leases
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At 31 October 2019 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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DAVID BROWN AUTOMOTIVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2019
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Post balance sheet events
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Following the year end, 899 Ordinary shares were issued for a total of £899.
The £10,000,000 loan included in creditors as at the year end was satisfied by the issue of an additional 100 Ordinary shares for a total of £9,000,000, with the remaining balance satisfied by the transfer of assets with a market value of £1,000,000.
Following the issue of these shares, there was no longer an ultimate controlling party.
An amount of £4,616,991 included in amounts owed to group undertakings as at the year end was waived following the capital restructure.
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Related party transactions
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At the Balance Sheet date, included within other loans in creditors is an amount of £10,000,000 (2018: £nil) due to an individual who was a shareholder and director for part of the year. The loan is unsecured and interest free.
At the Balance Sheet date, included within amounts owed to group companies in creditors is an amount of £4,616,991 (2018: £12,635,331) owed to a company controlled by an individual who was a shareholder and director for part of the year. The loan is unsecured, interest free and repayable on demand.
At the Balance Sheet date, included within amounts owed to group companies is an amount of £63,000 (2018: £63,000) owed to a company controlled by an individual who was a shareholder and director for part of the year. The loan is unsecured, interest free and repayable on demand.
At the Balance Sheet date, included within trade creditors is an amount of £133,192 (2018: £nil) owed to a company controlled by an individual who was a shareholder and director for part of the year.
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The auditors' report on the financial statements for the year ended 31 October 2019 was unqualified.
The audit report was signed on 27 January 2021 by Rajiv Thakerar (Senior statutory auditor) on behalf of Simmons Gainsford LLP.
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