Abbey Garages (Cardiff) Limited Company accounts

ABBEY GARAGES (CARDIFF) LIMITED - Company Information

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COMPANY REGISTRATION NUMBER: 01403368

ABBEY GARAGES (CARDIFF) LIMITED

FINANCIAL STATEMENTS

28 February 2022

ABBEY GARAGES (CARDIFF) LIMITED

FINANCIAL STATEMENTS

Year ended 28 February 2022

CONTENTS	PAGE

Officers and professional advisers	1

Strategic report	2

Director's report	4

Independent auditor's report to the member	6

Profit and loss account	10

Balance sheet	11

Statement of changes in equity	12

Notes to the financial statements	13

ABBEY GARAGES (CARDIFF) LIMITED

OFFICERS AND PROFESSIONAL ADVISERS

Director	Mr R C Pugsley

Company secretary	Mr R J Evans

Registered office	281 Penarth Road
	Cardiff
	CF11 8YZ

Auditor	Kilsby & Williams LLP
	Chartered Accountants & statutory auditor
	Cedar House
	Hazell Drive
	Newport
	NP10 8FY

ABBEY GARAGES (CARDIFF) LIMITED

STRATEGIC REPORT

Year ended 28 February 2022

Business review The results for the year are shown in the profit and loss account on page 11 and show a profit before tax for the financial year of £341,231 (2021: loss £489,786). This review includes the final full year of operating the Volvo car franchise. For both Volvo and Ford supply chain issues have severely limited the number of new vehicles that they have been able to supply this has affected all vehicle types but has been particularly evident in the electric vehicle market. Vehicle cost and a lack of an adequate charging infrastructure continues to be a drag on sales growth. Volumes at the Transit commercial vehicle franchise continues to improve in both vehicle sales and servicing. Strategy and future prospects The Company considers its short, medium and long-term strategies. The Company has operated as a Franchised Motor Dealership for in excess of 40 years. The Company's Ford Car and Commercial Vehicle operations continue from its existing premises and in addition is expanding its non-franchised business operations. Principal risks and uncertainties The potential risks to the business arising from uncertainty of vehicle supply have continued to be present both in the year under review and in the subsequent trading period. The vehicle distribution model is under review by most manufacturers/importers. A number of them seeking to test various operating models in a variety of markets worldwide. As yet, there is no clear consensus of what that distribution model should look like. During the period up to the signing of these accounts, the Company has at all times operated within its banking covenants and, based on current forecasts, fully expects to continue to do so. As with any business, economic downturn presents uncertainty. The Company recognises the cyclical nature of the economy and makes investment decisions based on its assessment of the prospects for economic growth and the future demand for its products and services. The Company sources its main products i.e. motor vehicles and motor vehicle parts primarily from the manufacturers of these products. As part of its ongoing reviews, the Company maintains a watch on the financial performance, viability and future prospects of its vehicle and parts suppliers. The Company is satisfied that its suppliers continue to invest in new products and technology that enable the Company to achieve a satisfactory return on its investments in the brands that it represents. Section 172 statement The Director of the Company acts in a way that considers and promotes the success of the company in line with the requirements of s172 of the Companies Act 2006. When making decisions, the Director considers all stakeholders and the wider impacts of such decisions, including the impact of the Company's operations on the community and environment, responsible business practices and the likely consequences of decisions in the long term. The size of the Company enables the Director to regularly consult with other senior managers in the Company, aiding in the decision-making process. The Company is subject to external audits carried out by vehicle manufacturers, quality control audits by external third parties and Government agencies. Its Accident Repair Centre is audited by the British Standards Institution for which it holds the BS 10125 approval. The Company is registered with the Financial Conduct Authority in respect of its regulated financial activities and the relevant staff are trained and tested by external providers to ensure full compliance. Technical, sales and customer facing staff are trained to the latest vehicle manufacturer standards in all aspects of their work and such training is monitored to ensure it is both relevant and current. A number of the Management team hold academic and professional qualifications specifically related to the business which the Company operates and the Director and a number of the senior Management team hold internationally recognised professional qualifications. The Director recognises the importance of staff engagement in the Company, and participates in the Ford Consumer Experience Movement, now renamed CX, designed to increase and maintain staff engagement in the Company, ultimately improving all aspects of the customer interaction with the Company. The Company mission statement is "To provide outstanding levels of employee and customer satisfaction, and thereby keep them for life." The Company has been frequent winners of the Ford Customer Satisfaction Award over a period of more than 25 years. The Company is also a member of the Retail Automotive Alliance an organisation which inter alia, promotes best practice in the industry as does the National Franchised Dealers Association-part of the Retail Motor Industry, which the Company subscribes to. Good working relationships with suppliers are important to the success of the Company. The Company at all times acts responsibly and ethically in its dealings with suppliers. The Director is a member of the Ford Dealer Council -a committee of 12 Dealer representatives whose aim is to maintain a successful working relationship between Ford Motor Company and its dealers. The Director is also a member of a number of working groups within this structure-as are other senior members of the Management Team.

This report was approved by the board of directors on 21 November 2022 and signed on behalf of the board by:

Mr R J Evans Company secretary

ABBEY GARAGES (CARDIFF) LIMITED

DIRECTOR'S REPORT

Year ended 28 February 2022

The director presents his report and the financial statements of the company for the year ended 28 February 2022 .

Director

The director who served the company during the year was as follows:

Mr R C Pugsley

Dividends

The director does not recommend the payment of a dividend.

Events after the end of the reporting period

Particulars of events after the reporting date are detailed in note 23 to the financial statements.

Disclosure of information in the strategic report

In accordance with section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 we set out in the company's strategic report information required by schedule 7 of the Large and Medium sized companies and Groups (Accounts and report) Regulations 2008.

Director's responsibilities statement

The director is responsible for preparing the strategic report, director's report 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). 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 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 judgments 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 them 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.

Auditor

Each of the persons who is a director at the date of approval of this report confirms that:

- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.

This report was approved by the board of directors on 21 November 2022 and signed on behalf of the board by:

Mr R J Evans Company secretary

INDEPENDENT AUDITOR'S REPORT TO THE MEMBER OF ABBEY GARAGES (CARDIFF) LIMITED

Year ended 28 February 2022

Opinion

We have audited the financial statements of Abbey Garages (Cardiff) Limited (the 'company') for the year ended 28 February 2022 which comprise the profit and loss account, balance sheet, statement of changes in equity and the related notes, 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 FRS 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 28 February 2022 and of its profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - 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 auditor's 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 other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The director is responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

- the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

- the strategic report and the director's report 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 director's report. We have nothing to report in respect of the following matters in relation to which 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 directors As explained more fully in the directors' responsibilities statement, 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 is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's 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 an auditor’s report 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. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. We focussed on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation, enquiries with management and enquiries of legal counsel. There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. We did not identify any key audit matters relating to irregularities, including fraud. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the director. - Conclude on the appropriateness of the director's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Use of our report

This report is made solely to the company's member, 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 member those matters we are required to state to them in an auditor's report 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 member as a body, for our audit work, for this report, or for the opinions we have formed.

Simon Tee

(Senior Statutory Auditor)

For and on behalf of

Kilsby & Williams LLP

Chartered Accountants & statutory auditor

Cedar House

Hazell Drive

Newport

NP10 8FY

23 November 2022

ABBEY GARAGES (CARDIFF) LIMITED

PROFIT AND LOSS ACCOUNT

Year ended 28 February 2022

		2022	2021
Note		£	£
TURNOVER	5	39,639,241	39,089,427

Cost of sales	( 34,483,509)	( 34,941,255)
	-------------	-------------
GROSS PROFIT	5,155,732	4,148,172

Distribution costs		( 1,769,817)	( 1,668,346)
Administrative expenses		( 3,142,356)	( 3,589,403)
Other operating income	6	161,699	842,138
		------------	------------
OPERATING PROFIT/(LOSS)	7	405,258	( 267,439)

Interest payable and similar expenses	10	( 64,027)	( 222,347)
		------------	------------
PROFIT/(LOSS) BEFORE TAXATION		341,231	( 489,786)

Tax on profit/(loss)	11	( 97,129)	1,412
		---------	---------
PROFIT/(LOSS) FOR THE FINANCIAL YEAR AND TOTAL COMPREHENSIVE INCOME		244,102	( 488,374)
		---------	---------

All the activities of the company are from continuing operations.

ABBEY GARAGES (CARDIFF) LIMITED

BALANCE SHEET

28 February 2022

	2022	2021
Note	£	£

FIXED ASSETS

Tangible assets	12	3,822,893	3,934,251

CURRENT ASSETS

Stocks	13	7,970,483	11,027,681
Debtors	14	1,041,245	1,278,091
Cash at bank and in hand		9,756	14,417
		------------	-------------
		9,021,484	12,320,189

CREDITORS: amounts falling due within one year	15	( 11,906,515)	( 15,578,979)
		-------------	-------------
NET CURRENT LIABILITIES		( 2,885,031)	( 3,258,790)
		------------	------------
TOTAL ASSETS LESS CURRENT LIABILITIES		937,862	675,461

PROVISIONS	16	( 98,247)	( 79,948)
		---------	---------
NET ASSETS		839,615	595,513
		---------	---------

CAPITAL AND RESERVES

Called up share capital	20	600,000	600,000
Revaluation reserve	21	821,496	830,915
Profit and loss account	21	( 581,881)	( 835,402)
		---------	---------
SHAREHOLDERS FUNDS		839,615	595,513
		---------	---------

These financial statements were approved by the board of directors and authorised for issue on 21 November 2022 , and are signed on behalf of the board by:

Mr R C Pugsley
Director

Company registration number: 01403368

ABBEY GARAGES (CARDIFF) LIMITED

STATEMENT OF CHANGES IN EQUITY

Year ended 28 February 2022

		Called up share capital	Revaluation reserve	Profit and loss account	Total
		£	£	£	£
AT 1 MARCH 2020		600,000	840,334	( 356,447)	1,083,887

Loss for the year				( 488,374)	( 488,374)
Other comprehensive income for the year:
	Reclassification from revaluation reserve to profit and loss account	–	( 9,419)	9,419	–
		---------	---------	---------	------------
TOTAL COMPREHENSIVE INCOME FOR THE YEAR		–	( 9,419)	( 478,955)	( 488,374)

AT 28 FEBRUARY 2021		600,000	830,915	( 835,402)	595,513

Profit for the year				244,102	244,102
Other comprehensive income for the year:
	Reclassification from revaluation reserve to profit and loss account	–	( 9,419)	9,419	–
		---------	---------	---------	------------
TOTAL COMPREHENSIVE INCOME FOR THE YEAR		–	( 9,419)	253,521	244,102

		---------	---------	---------	------------
AT 28 FEBRUARY 2022		600,000	821,496	( 581,881)	839,615
		---------	---------	---------	------------

ABBEY GARAGES (CARDIFF) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

Year ended 28 February 2022

1. GENERAL INFORMATION

The company is a private company limited by shares, registered in England and Wales. The address of the registered office is 281 Penarth Road, Cardiff, CF11 8YZ.

2. STATEMENT OF COMPLIANCE

These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.

3. ACCOUNTING POLICIES

Basis of preparation

The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.

The financial statements are prepared in sterling, which is the functional currency of the entity.

Disclosure exemptions

The entity satisfies the criteria of being a qualifying entity as defined in FRS 102. Its financial statements are consolidated into the financial statements of Penarth Commercial Properties (Holdings) Limited which can be obtained from 281 Penarth Road, Cardiff. As such, advantage has been taken of the following disclosure exemptions available under paragraph 1.12 of FRS 102: (a) Disclosures in respect of each class of share capital have not been presented. (b) No cash flow statement has been presented for the company. (c) No disclosure has been given for the aggregate remuneration of key management personnel.

Turnover

Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably. Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that it is probable the expenses recognised will be recovered.

Taxation

The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.

Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.

Tangible assets

Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.

Depreciation

Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:

Freehold property	-	30 years on buildings
Plant and machinery	-	2 to 10 years
Fixtures and fittings	-	4 to 10 years

Stocks

Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell and include interest bearing consignment vehicles. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition. Provisions are made for obsolete and slow moving items where appropriate. Consignment stock are considered to be under the control of the company and are included in 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 creditors.

Government grants

Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received. Government grants are recognised using the accrual model and the performance model. Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable. Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income and not deducted from the carrying amount of the asset. Under the performance model, where the grant does not impose specified future performance-related conditions on the recipient, it is recognised in income when the grant proceeds are received or receivable. Where the grant does impose specified future performance-related conditions on the recipient, it is recognised in income only when the performance-related conditions have been met. Where grants received are prior to satisfying the revenue recognition criteria, they are recognised as a liability.

Provisions

Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the balance sheet and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.

Financial instruments

A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Debt instruments are subsequently measured at amortised cost. Where investments in non-convertible preference shares and non-puttable ordinary shares or preference shares are publicly traded or their fair value can otherwise be measured reliably, the investment is subsequently measured at fair value with changes in fair value recognised in profit or loss. All other such investments are subsequently measured at cost less impairment. Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Other financial instruments are subsequently measured at fair value, with any changes recognised in profit or loss, with the exception of hedging instruments in a designated hedging relationship.

Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.

Defined contribution plans

Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

4. JUDGEMENTS IN APPLYING ACCOUNTING POLICIES AND KEY SOURCES OF

ESTIMATION UNCERTAINTY

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Key sources of estimation uncertainty

Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. There are no judgements or estimates made by the director in the application of these accounting policies that have a significant effect on the financial statements.

5. TURNOVER

Turnover arises from:

	2022	2021
	£	£
Sale of goods	36,360,610	36,392,197
Rendering of services	3,278,631	2,697,230
	-------------	-------------
	39,639,241	39,089,427
	-------------	-------------

The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.

6. OTHER OPERATING INCOME

	2022	2021
	£	£
Government grant income	78,375	721,287
Other operating income	83,324	120,851
	---------	---------
	161,699	842,138
	---------	---------

7. OPERATING PROFIT

Operating profit or loss is stated after charging:

	2022	2021
	£	£
Depreciation of tangible assets	219,525	195,684
Impairment of trade debtors	19,984	40,459
	---------	---------

8. AUDITOR'S REMUNERATION

	2022	2021
	£	£
Fees payable for the audit of the financial statements	12,850	12,250
	--------	--------

9. STAFF COSTS

The average number of persons employed by the company during the year, including the director, amounted to:

	2022	2021
	No.	No.
Administrative staff	29	32
Management staff	12	13
Number of service and sales staff	65	91
	----	----
	106	136
	----	----

The aggregate payroll costs incurred during the year, relating to the above, were:

	2022	2021
	£	£
Wages and salaries	2,958,298	3,228,630
Social security costs	283,415	315,470
Other pension costs	64,291	59,416
	------------	------------
	3,306,004	3,603,516
	------------	------------

10. INTEREST PAYABLE AND SIMILAR EXPENSES

	2022	2021
	£	£
Manufacturer standard vehicle stocking plans	28,853	192,365
Other interest payable and similar charges	35,174	29,982
	--------	---------
	64,027	222,347
	--------	---------

11. TAX ON PROFIT/(LOSS)

Major components of tax expense/(income)

	2022	2021
	£	£

Current tax:

UK current tax expense	81,706	–
Adjustments in respect of prior periods	( 2,876)	–
Charge for group relief	–	(168,105)
	--------	---------
Total current tax	78,830	( 168,105)
	--------	---------

Deferred tax:

Origination and reversal of timing differences	18,299	166,693
	--------	---------
Tax on profit/(loss)	97,129	( 1,412)
	--------	---------

Reconciliation of tax expense/(income)

The tax assessed on the profit/(loss) on ordinary activities for the year is higher than (2021: higher than) the standard rate of corporation tax in the UK of 19 % (2021: 19 %).

	2022	2021
	£	£
Profit/(loss) on ordinary activities before taxation	341,231	( 489,786)
	---------	---------
Profit/(loss) on ordinary activities by rate of tax	64,834	( 93,059)
Adjustment to tax charge in respect of prior periods	( 2,876)	–
Effect of expenses not deductible for tax purposes	913	9,140
Effect of capital allowances and depreciation	14,773	78,419
Unused tax losses	–	6,061
Effect of a change in the rate of tax	23,579	(1,973)
Capital allowances super deduction	(4,094)	–
	---------	---------
Tax on profit/(loss)	97,129	( 1,412)
	---------	---------

12. TANGIBLE ASSETS

	Freehold property	Plant and machinery	Fixtures and fittings	Total
	£	£	£	£
Cost
At 1 March 2021	5,176,699	685,259	1,129,147	6,991,105
Additions	26,100	35,770	46,297	108,167
Disposals	–	( 60,597)	( 41,207)	( 101,804)
	------------	---------	------------	------------
At 28 February 2022	5,202,799	660,432	1,134,237	6,997,468
	------------	---------	------------	------------
Depreciation
At 1 March 2021	1,582,752	575,528	898,574	3,056,854
Charge for the year	114,217	45,429	59,879	219,525
Disposals	–	( 60,597)	( 41,207)	( 101,804)
	------------	---------	------------	------------
At 28 February 2022	1,696,969	560,360	917,246	3,174,575
	------------	---------	------------	------------
Carrying amount
At 28 February 2022	3,505,830	100,072	216,991	3,822,893
	------------	---------	------------	------------
At 28 February 2021	3,593,947	109,731	230,573	3,934,251
	------------	---------	------------	------------

Included within freehold land and buildings is land amounting to £1,286,812 (2020 - £1,286,812) which is not depreciated.

Tangible assets held at valuation

The freehold premises at 281 Penarth Road included above at deemed cost, were professionally valued by Messrs Cooke and Arkwright on an existing use open market basis in a report dated 19 April 1989. The freehold premises at 281 Penarth Road were professionally valued by Messrs Cushman and Wakefield in a report dated 28 August 2019 at a value of £5.9m. This uplift has not been reflected in these accounts. Other tangible fixed assets, including additions subsequent to the revaluation of land and buildings, are included at cost.

In respect of tangible assets held at valuation, the aggregate cost, depreciation and comparable carrying amount that would have been recognised if the assets had been carried under the historical cost model are as follows:

	Freehold property
	£
At 28 February 2022
Aggregate cost	446,416
Aggregate depreciation	(404,100)
	---------
Carrying value	42,316
	---------

At 28 February 2021
Aggregate cost	446,416
Aggregate depreciation	(393,853)
	---------
Carrying value	52,563
	---------

13. STOCKS

	2022	2021
	£	£
Stock	7,970,483	11,027,681
	------------	-------------

14. DEBTORS

	2022	2021
	£	£
Trade debtors	636,147	529,800
Amounts owed by group undertakings	220,087	423,540
Prepayments and accrued income	86,017	58,077
Other debtors	98,994	266,674
	------------	------------
	1,041,245	1,278,091
	------------	------------

15. CREDITORS: amounts falling due within one year

	2022	2021
	£	£
Bank loans and overdrafts	4,479,786	4,063,015
Trade creditors	5,402,754	9,679,348
Accruals and deferred income	980,879	774,904
Corporation tax	81,706	2,876
Social security and other taxes	138,771	61,304
Vehicle funding	702,779	874,394
Other creditors	119,840	123,138
	-------------	-------------
	11,906,515	15,578,979
	-------------	-------------

The bank overdraft is secured by certain properties of the group. Included within trade creditors are stocking loans totalling £4.8m (2021 - £9.3m) which are secured on the vehicles to which they relate.

16. PROVISIONS

	Deferred tax (note 17)
	£
At 1 March 2021	79,948
Additions	18,299
	--------
At 28 February 2022	98,247
	--------

17. DEFERRED TAX

The deferred tax included in the balance sheet is as follows:

	2022	2021
	£	£
Included in provisions (note 16)	98,247	79,948
	--------	--------

The deferred tax account consists of the tax effect of timing differences in respect of:

	2022	2021
	£	£
Accelerated capital allowances	176,048	137,790
Unused tax losses	( 75,095)	( 57,072)
Provisions	( 1,432)	–
Pension plan obligations	( 1,274)	( 770)
	---------	---------
	98,247	79,948
	---------	---------

18. EMPLOYEE BENEFITS

Defined contribution plans

The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 64,291 (2021: £ 59,416 ).

19. GOVERNMENT GRANTS

The amounts recognised in the financial statements for government grants are as follows:

	2022	2021
	£	£

Recognised in other operating income:

Government grants recognised directly in income	78,375	721,287
	--------	---------

20. CALLED UP SHARE CAPITAL

Issued, called up and fully paid

	2022		2021
	No.	£	No.	£
Ordinary shares of £ 1 each	600,000	600,000	600,000	600,000
	---------	---------	---------	---------

21. RESERVES

Revaluation reserve - This reserve records the value of asset revaluations and fair value movements on assets recognised in other comprehensive income. Profit and loss account - This reserve records retained earnings and accumulated losses.

22. CONTINGENCIES

The company is contingently liable, together with its ultimate parent and certain fellow subsidiary undertakings, for an unlimited multilateral guarantee in respect of the net position of the group's bank overdrafts and cash balances. The net liability at 28 February 2022 was £1,248,814 (2021 - £697,404).

23. EVENTS AFTER THE END OF THE REPORTING PERIOD

On 15 March 2022 the company exited the Volvo franchise and will no longer sell new Volvo cars or provide approved after sales services. Following its exit from this franchise, the Company will utilise the fixed assets available for more revenue and profit generating activities aligned to its continuing and additional operations within the motor industry.

24. RELATED PARTY TRANSACTIONS

The Company has taken advantage of the exemption and not disclosed transactions with other wholly owned entities which form part of the Penarth Commercial Properties (Holdings) Limited group.

25. CONTROLLING PARTY

The company's ultimate parent is Penarth Commercial Properties (Holdings) Limited, a company registered in England and Wales. Its immediate parent undertaking is Penarth Commercial Properties Limited, a company registered in England and Wales. The largest and smallest group in which the results of the company are consolidated is that headed by Penarth Commercial Properties (Holdings) Limited. The consolidated accounts of these companies are available to the public and may be obtained from their registered office: Ford House, 281 Penarth Road, Cardiff. The ultimate controlling party is considered to be Roger Pugsley by virtue of his 100% shareholding in Penarth Commercial Properties (Holdings) Limited.