Farmer and Carlisle Limited - Limited company accounts 20.1

REGISTERED NUMBER: 01210153 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

FOR

FARMER AND CARLISLE LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Statement of Comprehensive Income

8

Balance Sheet

9

Statement of Changes in Equity

10

Cash Flow Statement

11

Notes to the Cash Flow Statement

12

Notes to the Financial Statements

14

DIRECTORS:

J O Carlisle

Mrs D M Carlisle

J A Carlisle

I Hall

J D Carlisle

Mrs J E E Sankey

Mrs M J West

M J Tongue

SECRETARY:

M J Tongue

REGISTERED OFFICE:

Belton Road

Loughborough

Leicestershire

LE11 1ND

REGISTERED NUMBER:

01210153 (England and Wales)

AUDITORS:

Lemans

Statutory Auditor

29 Arboretum Street

Nottingham

Nottinghamshire

NG1 4JA

The directors present their strategic report for the year ended 31 December 2020.

REVIEW OF BUSINESS

Due to the Covid-19 pandemic, 2020 was a year like no other and created many new challenges. In accordance with government restrictions the dealership closed on 24 March meaning that delivery of new vehicles scheduled for March 2020 to be put on hold. Over the coming months as restrictions eased the dealership reopened. Demand for hybrid vehicles remains very strong and this has helped the company bounce back strongly.

Despite the challenging conditions after sales continued to perform well.

Although sales levels were down, primarily due to the current economic environment and the factors mentioned above, gross margin held up well at £966,514 (2019 - £954,045). Given the strengthening of the company's order book the directors are confident that sales volumes will increase in the future, but this might take longer than initially anticipated due to the Covid-19 situation.

Analysis of sales for the year is shown below:-

Increase /

2020

2019

(decrease)

£

£

%

Sale of motor vehicles

11,469,792

11,900,721

(3.6

)

Sale of associated services

1,972,243

2,282,405

(13.6

)

Commissions and discounts

730,556

789,399

(7.5

)

With support the company received under the government furlough scheme and rate relief helping to soften the impact of the pandemic, the company made a profit for after taxation for the year amounting to £149,146 (2019 - £71,744).

COVID-19

2021 is going to be another challenging year for all businesses. During quarter one further government restrictions meant that trade again was limited, however as these have eased the market has recovered strongly especially in the used car sector with high demand keeping values strong.

The directors remain confident about future trading and consider that with its committed staff and the strength of the Toyota brand are well placed to overcome this unprecedented situation.

PRINCIPAL RISKS AND UNCERTAINTIES

Competitive pressure in the retail motor sector and after sales is a continuing risk to the business which could result in losing sales to revival franchise dealerships and none franchised garages. To manage this risk, the company and Toyota continue to strongly promote the vehicle range especially in the 'hybrid sector' where it is seen as a market leader. This combined with the continuing subsidised interest free finance packages available should help retain sales volume, and provide competitively priced economical vehicles to the private sector. At all times the company aims to provide an excellent sales and after sales service to all its customers to maintain and promote customer loyalty.

Whilst Covid-19 continues to be a risk to the general economic environment, the company has taken all necessary measures to minimise the impact of a new Covid-19 spike.

ON BEHALF OF THE BOARD:

J O Carlisle - Director

30 September 2021

The directors present their report with the financial statements of the company for the year ended 31 December 2020.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of the sale and maintenance of new and used motor vehicles.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2020.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2020 to the date of this report.

J O Carlisle

Mrs D M Carlisle

J A Carlisle

I Hall

J D Carlisle

Mrs J E E Sankey

Mrs M J West

Other changes in directors holding office are as follows:

M J Tongue was appointed as a director after 31 December 2020 but prior to the date of this report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

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

ON BEHALF OF THE BOARD:

J O Carlisle - Director

30 September 2021

Opinion

We have audited the financial statements of Farmer and Carlisle Limited (the 'company') for the year ended 31 December 2020 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2020 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 directors' 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 directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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 Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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 exercise professional judgment and maintain professional scepticism throughout the planning and performance of the audit;

-

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 entity's internal control;

-

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. We are required to 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.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Adrian Harby FCCA (Senior Statutory Auditor)

for and on behalf of Lemans

Statutory Auditor

29 Arboretum Street

Nottingham

Nottinghamshire

NG1 4JA

30 September 2021

TURNOVER

3

14,172,591

14,972,525

Cost of sales

13,206,077

14,018,480

GROSS PROFIT

966,514

954,045

Administrative expenses

903,395

976,799

63,119

(22,754

)

Other operating income

130,500

126,000

OPERATING PROFIT

5

193,619

103,246

Interest receivable and similar income

27

20

193,646

103,266

Interest payable and similar expenses

6

1,534

4,335

PROFIT BEFORE TAXATION

192,112

98,931

Tax on profit

7

42,966

27,187

PROFIT FOR THE FINANCIAL YEAR

149,146

71,744

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

149,146

71,744

FIXED ASSETS

Tangible assets

8

2,449,977

2,488,202

Investments

9

100

100

2,450,077

2,488,302

CURRENT ASSETS

Stocks

10

1,565,886

1,471,482

Debtors

11

2,343,936

2,386,153

Cash at bank and in hand

748

878

3,910,570

3,858,513

CREDITORS

Amounts falling due within one year

12

1,863,326

2,006,427

NET CURRENT ASSETS

2,047,244

1,852,086

TOTAL ASSETS LESS CURRENT LIABILITIES

4,497,321

4,340,388

CREDITORS

Amounts falling due after more than one year

13

(15,216

)

(6,858

)

PROVISIONS FOR LIABILITIES

17

(14,752

)

(15,323

)

NET ASSETS

4,467,353

4,318,207

CAPITAL AND RESERVES

Called up share capital

18

270,000

270,000

Revaluation reserve

19

1,533,821

1,545,018

Retained earnings

19

2,663,532

2,503,189

SHAREHOLDERS' FUNDS

4,467,353

4,318,207

The financial statements were approved by the Board of Directors and authorised for issue on 30 September 2021 and were signed on its behalf by:

J O Carlisle - Director

Called up

share

Retained

Revaluation

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 January 2019

270,000

2,442,726

1,533,737

4,246,463

Changes in equity

Total comprehensive income

-

60,463

11,281

71,744

Balance at 31 December 2019

270,000

2,503,189

1,545,018

4,318,207

Changes in equity

Total comprehensive income

-

160,343

(11,197

)

149,146

Balance at 31 December 2020

270,000

2,663,532

1,533,821

4,467,353

Cash flows from operating activities

Cash generated from operations

1

341,168

275,655

Interest paid

(991

)

(3,792

)

Interest element of hire purchase payments paid

(543

)

(543

)

Tax paid

(23,356

)

(19,496

)

Net cash from operating activities

316,278

251,824

Cash flows from investing activities

Purchase of tangible fixed assets

(17,725

)

(34,571

)

Interest received

27

20

Net cash from investing activities

(17,698

)

(34,551

)

Cash flows from financing activities

New loans in year

8,237

-

Loan repayments in year

(25,000

)

(125,000

)

Capital repayments in year

(27,867

)

91,934

Net cash from financing activities

(44,630

)

(33,066

)

Increase in cash and cash equivalents

253,950

184,207

Cash and cash equivalents at beginning of year

2

(271,398

)

(455,605

)

Cash and cash equivalents at end of year

2

(17,448

)

(271,398

)

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

31.12.20

31.12.19

£

£

Profit before taxation

192,112

98,931

Depreciation charges

55,950

57,083

Finance costs

1,534

4,335

Finance income

(27

)

(20

)

249,569

160,329

Increase in stocks

(94,404

)

(19,129

)

Decrease in trade and other debtors

42,217

68,985

Increase in trade and other creditors

143,786

65,470

Cash generated from operations

341,168

275,655

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2020

31.12.20

1.1.20

£

£

Cash and cash equivalents

748

878

Bank overdrafts

(18,196

)

(272,276

)

(17,448

)

(271,398

)

Year ended 31 December 2019

31.12.19

1.1.19

£

£

Cash and cash equivalents

878

993

Bank overdrafts

(272,276

)

(456,598

)

(271,398

)

(455,605

)

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1.1.20

Cash flow

At 31.12.20

£

£

£

Net cash

Cash at bank and in hand

878

(130

)

748

Bank overdrafts

(272,276

)

254,080

(18,196

)

(271,398

)

253,950

(17,448

)

Debt

Finance leases

(171,389

)

27,867

(143,522

)

Debts falling due within 1 year

(50,000

)

21,470

(28,530

)

Debts falling due after 1 year

-

(4,707

)

(4,707

)

(221,389

)

44,630

(176,759

)

Total

(492,787

)

298,580

(194,207

)

1.	STATUTORY INFORMATION

Farmer and Carlisle Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

Preparation of consolidated financial statements

The financial statements contain information about Farmer and Carlisle Limited as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 400 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertaking are included by full consolidation in the consolidated financial statements of its parent, Farmer & Carlisle Holdings Limited, .

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Turnover

Revenue is recognised to the extent that is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sales of goods

Revenue from the sale of motor vehicles and associated services is recognised when all of the following conditions are satisfied:

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

despatch of goods;

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

ownership nor effective control over the goods sold;

- the amount of revenue can be measured reliably;

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

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

Fixed assets

Fixed assets are stated at cost or valuation. Depreciation is being charged so as to write off cost or valuation less any estimated residual value, over their expected useful lives. The rates and methods used are as follows:

Freehold property - 2% per annum on valuations plus additions at cost thereafter (excluding land).

Fixtures & fittings - 25%/20% per annum reducing balance & 5% straight line.

Motor vehicles - 20% per annum on cost.

Stock

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

Cost includes all costs incurred in bringing each product to its present location and condition which includes invoice cost plus freight and duty. Stock is valued using a first in first out basis. Net realisable value is based on estimated selling price less any further costs expected to be incurred to disposal.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Pension costs and other post-retirement benefits

The company operates defined contribution schemes. Premiums accrued due during the year are charged to the Profit and Loss Account. Any unpaid premiums at the year end are included in creditors.

Debtors and creditors receivable / payable

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

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

3.

TURNOVER

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

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

31.12.20

31.12.19

£

£

Sale of motor vehicles

11,469,792

11,900,721

Sale of associated services

1,972,243

2,282,405

Commissions and discounts

730,556

789,399

14,172,591

14,972,525

4.	EMPLOYEES AND DIRECTORS

31.12.20

31.12.19

£

£

Wages and salaries

1,217,143

1,405,266

Social security costs

113,306

124,152

Other pension costs

30,640

30,127

1,361,089

1,559,545

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

31.12.20

31.12.19

Sales

21

21

Workshop and stores

23

22

Clerical

13

12

Bodyshop

7

7

64

62

31.12.20

31.12.19

£

£

Directors' remuneration

305,190

316,030

Directors' pension contributions to money purchase schemes

1,914

1,976

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

Money purchase schemes

4

4

Information regarding the highest paid director is as follows:

31.12.20

31.12.19

£

£

Emoluments etc

85,391

115,451

Pension contributions to money purchase schemes

1,914

-

5.	OPERATING PROFIT

The operating profit is stated after charging:

31.12.20

31.12.19

£

£

Depreciation - owned assets

55,950

57,083

Auditors' remuneration

12,500

12,500

Operating lease rentals - plant and machinery

9,359

11,347

Grants Received

During the year to 31 December 2020 the company received support from the UK government under the Coronavirus Job Retention Scheme amounting to £272,158 (2019 - Nil).

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

31.12.20

31.12.19

£

£

Bank interest

991

3,792

Hire purchase interest

543

543

1,534

4,335

7.

TAXATION

Analysis of the tax charge

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

31.12.20

31.12.19

£

£

Current tax:

UK corporation tax

43,537

23,356

Deferred tax

(571

)

3,831

Tax on profit

42,966

27,187

UK corporation tax has been charged at 19% (2019 - 19%).

Reconciliation of total tax charge included in profit and loss

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

31.12.20

31.12.19

£

£

Profit before tax

192,112

98,931

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2019 - 19%)

36,501

18,797

Effects of:

Expenses not deductible for tax purposes

63

58

Depreciation in excess of capital allowances

6,969

3,919

Deferred taxation

(571

)

3,831

Pension contributions

4

582

Total tax charge

42,966

27,187