Bolton Car Centre Limited - Limited company accounts 20.1

REGISTERED NUMBER: 01560396 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTOR AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER 2021

FOR

BOLTON CAR CENTRE LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Director

4

Report of the Independent Auditors

6

Profit and Loss Account

10

Balance Sheet

11

Statement of Changes in Equity

12

Cash Flow Statement

13

Notes to the Financial Statements

14

DIRECTOR:

Mr M J Holt

REGISTERED OFFICE:

701 Manchester Road

Bury

BL9 9US

REGISTERED NUMBER:

01560396 (England and Wales)

AUDITORS:

Xeinadin Audit Limited

1 City Road East

Manchester

M15 4PN

The director presents his strategic report for the year ended 31st December 2021.

PRINCIPAL ACTIVITY

The principal activity of the company in the period under review was that of vehicle distributors and garage proprietors.

REVIEW OF BUSINESS

During the financial year the company continued to experience disruption from the COVID pandemic, albeit at a lower level and government support was taken where applicable.

Whilst the new vehicle volume fell slightly from 950 in 2020 to 747 this was better than the national picture which continues to be affected by the worldwide shortage of semiconductors.

Used volume was stable at 774 over 747 but the gross profit showed a very pleasing increase from 4.1% to over 9%.

We were able, thanks to our continuous monthly adjustment to stand in prices, to avoid the traditional end of financial year write down and post year end performance has continued to benefit.

During the year there was a transfer of properties to a connected party at market value.

Following the year end we have disposed of our two Citroen sites with not a single job loss, which was a priority bearing in mind our long serving loyal teams.

The resultant improvement in our remaining Hyundai operation has reaffirmed that this was the right decision.

PRINCIPAL RISKS AND UNCERTAINTIES

As in all businesses, the management of the company's operations and the nature of its strategy are subject to a number of risks, that the board regularly reviews in order to take the appropriate action to mitigate such risks. The board recognise the following as significant risks.

Product cycle risk

As new vehicles move through their natural life cycle, the company's ability to maintain adequate margins can be impaired. In order to minimise the impact of this the board has developed a broad base of income sources with different new vehicle franchises and the generation of significant contributions from non-franchised operations, including used vehicle sales, service repair and component sales.

Competition risk

The markets in which the company operates are highly competitive and there is a risk that the company's customers will look to alternative sources for the products and services offered by the company. The board has mitigated this risk by building a strong reputation for customer service, expanding its manufacturer representation, constantly monitoring quality of work and value for money.

The company continues to monitor competitor activity, customer's view and their level of satisfaction and invests significantly in staff training and skills development.

Manufacturers supply of new and used products

The company is reliant on new vehicle products from its manufacturer partners. This exposes the company to risks in a number of areas as the company is dependent on its manufacturer/supplier in respect of:

- availability of new vehicle products

- quality of new vehicle products

- pricing of new vehicle products

The director is confident that future new products from its manufacturers/suppliers will continue to be competitively priced and high quality and therefore consider that this "manufacturer risk" is minimal. It is, in any case, mitigated by the other core business areas of the company, including used vehicle sales, parts sales and service work.

Stock value risk

The company is exposed, are are all businesses in this industry, to the risk of the value of its stock in trade falling, due to general economic or industry specific factors. The director mitigates this risk through a two-fold policy of ensuring the company only carries stock of a suitable profile and price range that is appropriately aged, and by a strict monthly write-down policy that immediately recognises any fall in value through its profit and loss account.

KEY RISKS

The key risks to the business in future financial years continues to be increasing competition and customer demand for the vehicles offered by our franchises, especially in light of increased political uncertainty. Due to industry wide changes towards Hybrid and Electric vehicles over the coming years the risk of falling customer demand is considered to be low.

POST BALANCE SHEET EVENTS

On 7th March 2022 the company sold their Citroen dealerships based at Bolton and Blackburn to Chorley Group.

ON BEHALF OF THE BOARD:

Mr M J Holt - Director

13th September 2022

The director presents his report with the financial statements of the company for the year ended 31st December 2021.

DIVIDENDS

During the period, the company paid dividends of £1,700,000 (2020: £NIL).

DIRECTOR

Mr M J Holt held office during the whole of the period from 1st January 2021 to the date of this report.

REGISTERED OFFICE

The registered office of the company is:

BCC Group Administration

BCC Hyundai

701 Manchester Road

Bury

BL9 9US

PRINCIPAL PLACE OF BUSINESS

The company trades from several addresses as follows:

BCC Citroen Blackburn

BCC Citroen Bolton

Throstle Street

Higher Bridge Street

Blackburn

Bolton

BB2 1TQ

BL1 2HF

BCC Hyundai Bury

701 Manchester Road

Bury

BL9 9US

DISCLOSURE IN THE STRATEGIC REPORT

The company has chosen, in accordance with Section 414C(ii) of the Companies Act 2006, and as noted in this director's report, to include certain matters in its Strategic Report that would otherwise be required to be disclosed in this director's report, specifically in respect of the principal activity, review of the business, financial statements, proposed future developments and key risks to the business.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the director must not approve the financial statements unless he is 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 director is 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 director is 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 him to ensure that the financial statements comply with the Companies Act 2006. He is 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 director is 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 he 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

Xeinadin Audit Limited acquired the audit practice of Kay Johnson Gee Limited and has been appointed as auditor in succession. In accordance with section 485 of the Companies Act 2006, Xeinadin Audit Limited will be proposed for reappointment.

ON BEHALF OF THE BOARD:

Mr M J Holt - Director

13th September 2022

Opinion

We have audited the financial statements of Bolton Car Centre Limited (the 'company') for the year ended 31st December 2021 which comprise the Profit and Loss Account, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and 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 31st December 2021 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

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.

Other information

The director is responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Director, 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 this gives rise to a material misstatement in the financial statements themselves. 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 Director 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 Director 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 Director.

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 director's remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page five, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities including fraud and non-compliance with laws and regulations we have considered the following:

-

The nature of the industry and sector, control environment and business performance including the company's remuneration policies, key drivers for directors remuneration, bonus levels and performance targets;

-

Results of the enquiries of management about their own identification and assessment of the risks of

-

Any matters we have identified having obtained and reviewed the company's documentation of their policies and procedures relating to:

-

identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of noncompliance;

-

detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;

-

the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;

-

the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: timing of recognition of income and valuation of land and buildings. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included UK Companies Act, employment law, health and safety, pensions legislation and tax legislation.

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty.

Audit response to risks identified

Our procedures to respond to risks identified included the following:

-

reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

-

enquiring of management concerning actual and potential litigation and claims;

-

performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

-

reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and

-

in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including internal specialists, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

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.

Michael Garrett (Senior Statutory Auditor)

for and on behalf of Xeinadin Audit Limited

1 City Road East

Manchester

M15 4PN

13th September 2022

TURNOVER

4

29,124,297

31,218,242

Cost of sales

(25,852,330

)

(28,616,047

)

GROSS PROFIT

3,271,967

2,602,195

Administrative expenses

(2,799,779

)

(2,889,866

)

472,188

(287,671

)

Other operating income

163,080

417,761

635,268

130,090

Interest receivable and similar income

2,269

(297

)

637,537

129,793

Interest payable and similar expenses

6

(80,380

)

(115,701

)

PROFIT BEFORE TAXATION

7

557,157

14,092

Tax on profit

8

(77,079

)

(3,133

)

PROFIT FOR THE FINANCIAL YEAR

480,078

10,959

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

480,078

10,959

FIXED ASSETS

Tangible assets

10

192,741

1,807,949

CURRENT ASSETS

Stocks

11

3,354,429

7,031,548

Debtors

12

599,495

771,738

Cash at bank and in hand

679,333

993,696

4,633,257

8,796,982

CREDITORS

Amounts falling due within one year

13

(4,051,929

)

(8,615,163

)

NET CURRENT ASSETS

581,328

181,819

TOTAL ASSETS LESS CURRENT LIABILITIES

774,069

1,989,768

PROVISIONS FOR LIABILITIES

17

(33,275

)

(29,052

)

NET ASSETS

740,794

1,960,716

CAPITAL AND RESERVES

Called up share capital

18

14,000

14,000

Revaluation reserve

-

504,970

Capital redemption reserve

6,000

6,000

Retained earnings

720,794

1,435,746

SHAREHOLDERS' FUNDS

740,794

1,960,716

The financial statements were approved by the director and authorised for issue on 13th September 2022 and were signed by:

Mr M J Holt - Director

Called up

Capital

share

Retained

Revaluation

redemption

Total

capital

earnings

reserve

reserve

equity

£

£

£

£

£

Balance at 1st January 2020

14,000

1,419,971

509,786

6,000

1,949,757

Profit for the year

-

10,959

-

-

10,959

Total comprehensive income

-

10,959

-

-

10,959

Transfer between reserves

-

4,816

(4,816

)

-

-

Balance at 31st December 2020

14,000

1,435,746

504,970

6,000

1,960,716

Profit for the year

-

480,078

-

-

480,078

Total comprehensive income

-

480,078

-

-

480,078

Dividends

-

(1,700,000

)

-

-

(1,700,000

)

Transfer between reserves

-

504,970

(504,970

)

-

-

Balance at 31st December 2021

14,000

720,794

-

6,000

740,794

Cash flows from operating activities

Cash generated from operations

21

145,405

618,554

Interest paid

(80,380

)

(115,701

)

Tax paid

4,073

12,948

Net cash from operating activities

69,098

515,801

Cash flows from investing activities

Purchase of tangible fixed assets

(104,779

)

(54,604

)

Sale of tangible fixed assets

1,701,810

3,997

Interest received

2,269

(297

)

Net cash from investing activities

1,599,300

(50,904

)

Cash flows from financing activities

Loan advances/(repayments)

-

19,454

Loans repaid

(282,761

)

(356

)

Equity dividends paid

(1,700,000

)

-

Net cash from financing activities

(1,982,761

)

19,098

(Decrease)/increase in cash and cash equivalents

(314,363

)

483,995

Cash and cash equivalents at beginning of year

22

993,696

509,701

Cash and cash equivalents at end of year

22

679,333

993,696

1.	GENERAL INFORMATION

Bolton Car Centre Limited is a private company limited by shares, incorporated in the United Kingdom under the Companies Act. The address of its registered office and principal place of business are disclosed in the directors report. The principal activity and nature of its operations are set out in the strategic report.

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.

In the following accounting policies any references to the profit and loss account refers to the Statement of Comprehensive Income prior to the inclusion of other comprehensive income.

Going concern

The director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future and for this reason he continues to adopt the going concern basis in preparing the annual financial statements.

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

Turnover from the sale of goods is recognised in the profit and loss account, net of discounts, when the significant risks and rewards of ownership have been transferred to the buyer. In general this occurs when vehicles or parts have been supplied or when service has been completed. Turnover from services rendered is recognised in the profit and loss account in proportion to the stage of completion of the transaction at the reporting date. The stage of completion is assessed by surveys of work performed or by reference to time expended on services that are charged on labour rate basis.

Incentives received from manufacturers in respect of target achievements are recognised in the profit and loss account in the period to which the target was achieved.

Government grants

Government revenue grants are recognised in the profit and loss account over the period in which the related costs are recognised.

Tangible fixed assets

Tangible fixed assets are stated at cost or valuation less accumulated depreciation and accumulated impairment losses.

The latest revaluations were carried out on 15th June 2018.

Where parts of an item of tangible fixed assets have different useful lives, they are accounted for as separate items of tangible fixed assets, for example land is treated separately from buildings.

The company assesses at each reporting date whether tangible fixed assets are impaired.

Depreciation is charged to the profit or loss account so as to write off each asset over the estimated useful lives of each part of an item of tangible fixed assets. Leased assets are depreciated over the shorter of the lease term and their useful lives. Land is not depreciated. The following rates are used:

Freehold property

2% Straight line

Short leasehold improvements

6.89% Straight line

Plant and machinery

33% Reducing balance

Fixtures and fittings

33% Reducing balance

Depreciation methods, useful lives and residual values are reviewed if there is an indication of a significant change since the last annual reporting date.

Residual value is based on prices prevailing at the date of acquisition or subsequent valuation. Where, because of high estimated residual value, depreciation is immaterial, no depreciation is charged but an annual review for impairment is performed. Both residual values and useful lives are reviewed and adjusted, if appropriate, at each financial year end.

The profit or loss on disposals of properties is the difference between the net amount realised and book value. Valuation differences realised on disposals are transferred from the revaluation reserve to the profit and loss account reserve.

The carrying amounts of the company's assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of the fixed asset may not be recoverable. If any such indication exists, the asset's recoverable amount is estimated.

A revaluation loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Revaluation losses are recognised in the profit and loss account unless it arises on a previously revalued fixed asset. A revaluation loss on a revalued fixed asset is recognised as part of other comprehensive income until the carrying amount reaches the asset's depreciated historic cost. Thereafter, revaluation losses are recognised in the profit and loss account unless it can be demonstrated that the recoverable amount of the asset is greater than its revalued amount.

Revaluation gains are recognised in the profit and loss account only to the extent (after adjusting for subsequent depreciation) that they reverse revaluation losses on the same asset that were previously recognised in the profit and loss account. All other revaluation gains are recognised as part of other comprehensive income.

Stocks

Motor vehicle stocks are stated at the lower of cost and selling price less selling costs. Fair values are assessed using market research data which is based upon recent industry activity. Whilst the data is deemed representative of current values it is possible that ultimate sales values can vary from those applied.

Consignment vehicles are new unregistered vehicles owned by the manufacturers, mainly located at the company's premises, and insured by the company. New consignment vehicles in respect of which finance charges are levied are regarded as being effectively under the control of the company and are included within stocks on the balance sheet even though legal title has not yet passed to the company. The corresponding liability is included in creditors.

Parts inventories are based on an average purchase cost principle and are written down to selling price less selling costs by providing for obsolescence on a time in stock based formula approach.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Profit and Loss Account, 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 that have been enacted or substantively enacted by the balance sheet date.

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.

Financial instruments

Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Operating leases

Rental under operating leases are charged to the profit and loss account on a straight line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the period until the date the rent is expected to be adjusted to the prevailing market rate.

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.

Trade and other debtors

Trade and other debtors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method, less impairment losses for bad and doubtful debts except where the effect of discounting would be immaterial. In such cases, the receivables are stated at cost less impairment losses for bad and doubtful debts.

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand. Any bank overdrafts are shown within current liabilities.

Trade and other creditors

Trade and other creditors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost.

3.	SIGNIFICANT JUDGEMENTS AND ESTIMATES

In the application of the Company's accounting policies above, management is required to make judgements, estimates and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Provisions

The company accounts for provisions in accordance with FRS 102. There are currently the following types of provisions:

Stock impairment

A stock impairment is provided in order to value the stock in line with the accounting policy.

4.

TURNOVER

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

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

2021

2020

£

£

Sale of goods

25,050,197

27,075,595

Sale of services

1,554,369

1,109,630

Commissions and bonuses

150,872

190,606

Bonuses and promotions

2,368,859

2,842,411

29,124,297

31,218,242

All turnover arose within the United Kingdom.

5.	EMPLOYEES AND DIRECTORS

2021

2020

£

£

Wages and salaries

1,749,449

1,770,193

Social security costs

166,874

165,246

Other pension costs

37,427

37,530

1,953,750

1,972,969

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

2021

2020

Sales

20

20

Service

19

19

Parts

3

3

Administration

13

13

Drivers/valeters

8

8

Management

3

3

66

66

The cost of key management personnel was as follows:

2021

2020

£

£

Salaries

180,000

180,000

Social security costs

21,203

21,203

Pension costs

3,939

3,939

205,142

205,142

2021

2020

£

£

Director's remuneration

-

-

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

2021

2020

£

£

Interest payable

(441

)

(6,651

)

Stocking charges

80,821

122,352

80,380

115,701

7.	PROFIT BEFORE TAXATION

The profit is stated after charging/(crediting):

2021

2020

£

£

Depreciation - owned assets

96,224

92,545

Profit on disposal of fixed assets

(78,047

)

(1,726

)

Auditors' remuneration

15,000

15,000

8.

TAXATION

Analysis of the tax charge

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

2021

2020

£

£

Current tax:

UK corporation tax

85,958

11,177

Corporation tax prior years

(13,102

)

(15,096

)

Total current tax

72,856

(3,919

)

Deferred tax

4,223

7,052

Tax on profit

77,079

3,133

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2021

2020

£

£

Profit before tax

557,157

14,092

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2020 - 19%)

105,860

2,677

Effects of:

Expenses not deductible for tax purposes

(14,557

)

1,006

Capital allowances in excess of depreciation

(5,345

)

-

Depreciation in excess of capital allowances

-

7,494

Adjustments to tax charge in respect of previous periods

(13,102

)

(15,096

)

Deferred tax

4,223

7,052

Total tax charge

77,079

3,133

At 31 December 2021 the company had estimated capital losses of £30,589 (2020: £30,589) available to carry forward against future capital profits.