R.T. Rate Limited - Limited company accounts 20.1

REGISTERED NUMBER: 00553972 (England and Wales)

R.T. RATE LIMITED

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

Page

Company Information

1

Chairman's Report

2

Strategic Report

3

Report of the Directors

4

Report of the Independent Auditors

6

Statement of Income and Retained Earnings

10

Statement of Financial Position

11

Statement of Cash Flows

12

Notes to the Statement of Cash Flows

13

Notes to the Financial Statements

15

DIRECTORS:

C.J. Rate

M. Day

Mrs C.A.M. Rate

S.J. Rate

L. Padbury-Clark

REGISTERED OFFICE:

Rates Ford

Hogg Lane

Grays

Essex

RM17 5QL

REGISTERED NUMBER:

00553972 (England and Wales)

AUDITORS:

Bland Baker

Chartered Accountants and

Registered Auditor

21 Lodge Lane

Grays

Essex

RM17 5RY

From what promised to be a very uncertain year turned out to be one of success.

I do not have to comment on what the UK and the rest of the world has endured since March 2020, with so much uncertainty and stepping into the unknown. Fortunately, our government assisted in many ways financially which has allowed many businesses to survive and come out in a more organized fashion, much to the surprise of the majority.

Commenting on turnover and bearing in mind the business was closed for a period we still managed to deliver new and used vehicles and support a healthy service and parts department, turnover was reduced by just over 10 million pounds and as a result gross profit was also reduced. However, thanks to support from our local council and from government grants the operating profit improved over 2019 by £307,000.

Vehicle sales were reduced due to delivery issues and the inability for customers to view vehicles in the traditional showroom environment, however with the use of social media contact deliveries still took place with social distancing.

Aftermarket was a little more challenging in terms of distancing but with a little more organisation of collection, delivery, and mobile servicing, we managed to keep our customers on the road and completely satisfied with the efforts successfully executed.

The automotive industry is going through a number of major changes with a reduction in the dealer network in most franchises and the electrification challenge affecting all vehicle manufacturers. I am delighted to report that Rates are a Ford chosen partner for the future, paving the way for a greater marketing area and a brighter secure future for everyone involved with the company.

Customer satisfaction is still pivotal to the success of any business and I am happy to report that the company meets all the metrics Ford have in place to satisfy the strict standards Ford lay down for what is called CVP (Customer Viewpoint).

We are in the throes of increasing the main site by purchasing some additional land from Thurrock Council which will allow the site to be developed and for a new facility to be built to house the (newly) acquired commercial vehicle franchise, allowing a better customer and dealer personnel experience. These are very exciting times for the company.

We have an outstanding management structure within the company with determination, passion and dedication to satisfy our customers and employees and keep within government guidelines to navigate the company through what has been very difficult trading conditions.

It gives me immense pleasure to thank everyone for all the great work they have done to position Rates in a healthy, secure and safe place to work with more opportunities in the future.

C.J. Rate - Chairman

31 July 2021

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

REVIEW OF BUSINESS

A review of the business is contained within the Chairman's Report which forms part of this Strategic Report.

The company has strong cash reserves with minimal short term borrowings.

The directors consider that whilst the company has identified certain specific business risks below, they are of the opinion that suitable measures are in place to address them to ensure that ongoing operations do not affect the company's day to day obligations.

PRINCIPAL RISKS AND UNCERTAINTIES

The company faces the following principal risks:

Liquidity risk:

The company has strong cash reserves and primarily self funds its operations although periodically it utilises short term borrowing to fund any short term liquidity issues. The company's general expansion naturally creates increased pressure on its cash reserves but it has substantial support from its bankers.

Economic risk:

The challenges surrounding Brexit and the inherent implications on job security affects consumer confidence. Notwithstanding, the directors continue to review opportunities to increase revenue streams to mitigate any associated risks. The global pandemic of Covid-19 presented other uncertainties albeit the relaxation of the lockdown rules have shown a good return to new and used car sales and so too with the service department which is operating to capacity.

Environmental risk:

Concerns regarding CO2 emissions and the corresponding pressure on manufacturers to develop and improve alternate engine profiles and, in particular, the Government's official policy towards diesel vehicles.

Competition risk:

As always competition is strong in the new and used car sector with ever increasing pressure on margins and after market sales and servicing.

GOING CONCERN

Since the balance sheet date, the company has continued to generate significant profits and positive operating cashflows and has been able to meet its financial obligations as they become due.

The directors have reasonable grounds to assume that this will not change in the future and as such the directors continue to adopt the going concern basis of preparation of the financial statements.

ON BEHALF OF THE BOARD:

C.J. Rate - Director

31 July 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 a Ford main dealership, including new and used car sales, parts sales and servicing.

DIVIDENDS

Dividends voted in the year ended 31 December 2020 was £65,000 (2019 - £65,000).

DIRECTORS

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

C.J. Rate

M. Day

Mrs C.A.M. Rate

S.J. Rate

L. Padbury-Clark

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Annual Report 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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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, Bland Baker, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

C.J. Rate - Director

31 July 2021

Opinion

We have audited the financial statements of R.T. Rate Limited (the 'company') for the year ended 31 December 2020 which comprise the Statement of Income and Retained Earnings, Statement of Financial Position, Statement of Cash Flows and Notes to the Statement of Cash Flows, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the 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 Annual Report, 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 four, 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 have reviewed whether there were areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our sector experience through discussion with the officers and other management (as required by auditing standards).

-

We had regard to laws and regulations in areas that directly affect the financial statements including financial reporting and taxation legislation. We considered that extent of compliance with those laws and regulations as part of our procedures on the related financial statement items.

-

With the exception of any known or possible non-compliance, and as required by auditing standards, our work in respect of these was limited to enquiry of the officers.

-

We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.

-

We addressed the risk of fraud through management override of controls, by 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.

Our audit procedures were designed to respond to risks of material misstatement in the financial

statements, 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, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed 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 are to become aware of it.

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.

D. M. Baker (Senior Statutory Auditor)

for and on behalf of Bland Baker

Chartered Accountants and

Registered Auditor

21 Lodge Lane

Grays

Essex

RM17 5RY

2 August 2021

TURNOVER

3

71,924,263

81,987,983

Cost of sales

69,675,058

79,449,707

GROSS PROFIT

2,249,205

2,538,276

Administrative expenses

1,964,019

2,062,720

285,186

475,556

Other operating income

4

515,227

17,821

OPERATING PROFIT

6

800,413

493,377

Income from fixed asset investments

629

2,176

Interest receivable and similar income

1,756

2,055

2,385

4,231

802,798

497,608

Gain/loss on revaluation of investments

(18,917

)

(20,397

)

PROFIT BEFORE TAXATION

783,881

477,211

Tax on profit

7

153,534

93,237

PROFIT FOR THE FINANCIAL YEAR

630,347

383,974

Retained earnings at beginning of year

5,381,181

5,062,207

Dividends on equity shares

8

(65,000

)

(65,000

)

RETAINED EARNINGS AT END OF YEAR

5,946,528

5,381,181

FIXED ASSETS

Tangible assets

9

1,971,717

1,973,238

Investments

10

1,348

1,348

1,973,065

1,974,586

CURRENT ASSETS

Stocks

11

13,158,231

11,050,473

Debtors

12

3,731,708

2,205,584

Investments

13

26,111

44,583

Cash in hand

239,577

696,723

17,155,627

13,997,363

CREDITORS

Amounts falling due within one year

14

12,929,364

10,333,468

NET CURRENT ASSETS

4,226,263

3,663,895

TOTAL ASSETS LESS CURRENT LIABILITIES

6,199,328

5,638,481

PROVISIONS FOR LIABILITIES

18

27,000

31,500

NET ASSETS

6,172,328

5,606,981

CAPITAL AND RESERVES

Called up share capital

19

6,666

6,666

Share premium

20

290

290

Revaluation reserve - fixed

assets

20

215,511

215,511

Capital redemption reserve

20

3,333

3,333

Retained earnings

20

5,946,528

5,381,181

SHAREHOLDERS' FUNDS

6,172,328

5,606,981

The financial statements were approved by the Board of Directors and authorised for issue on 31 July 2021 and were signed on its behalf by:

C.J. Rate - Director

Cash flows from operating activities

Cash generated from operations

1

(645,544

)

750,226

Tax paid

(104,184

)

(141,687

)

Net cash from operating activities

(749,728

)

608,539

Cash flows from investing activities

Purchase of tangible fixed assets

(235,831

)

(251,633

)

Purchase of current asset investments

(445

)

-

Sale of tangible fixed assets

74,752

41,427

Sale of current asset investments

-

(49

)

Interest received

1,756

2,055

Dividends received

629

2,176

Net cash from investing activities

(159,139

)

(206,024

)

Cash flows from financing activities

New loans in year

746,390

260,214

Loan repaid in year

(260,214

)

(609,040

)

Amount introduced by directors

30,545

-

Amount withdrawn by directors

-

(102,195

)

Equity dividends paid

(65,000

)

(65,000

)

Net cash from financing activities

451,721

(516,021

)

Decrease in cash and cash equivalents

(457,146

)

(113,506

)

Cash and cash equivalents at beginning of year

2

696,723

810,229

Cash and cash equivalents at end of year

2

239,577

696,723

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

2020

2019

£

£

Profit before taxation

783,881

477,211

Depreciation charges

177,519

176,124

(Profit)/loss on disposal of fixed assets

(14,919

)

16,565

Loss on revaluation of fixed assets

18,917

20,397

Finance income

(2,385

)

(4,231

)

963,013

686,066

Increase in stocks

(2,107,758

)

(1,623,242

)

Increase in trade and other debtors

(1,533,858

)

(663,730

)

Increase in trade and other creditors

2,033,059

2,351,132

Cash generated from operations

(645,544

)

750,226

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 December 2020

31.12.20

1.1.20

£

£

Cash and cash equivalents

239,577

696,723

Year ended 31 December 2019

31.12.19

1.1.19

£

£

Cash and cash equivalents

696,723

810,229

3.	ANALYSIS OF CHANGES IN NET FUNDS/(DEBT)

At 1.1.20

Cash flow

At 31.12.20

£

£

£

Net cash

Cash at bank and in hand

696,723

(457,146

)

239,577

696,723

(457,146

)

239,577

Liquid resources

Current asset investments

44,583

(18,472

)

26,111

44,583

(18,472

)

26,111

Debt

Debts falling due within 1 year

(260,214

)

(486,176

)

(746,390

)

(260,214

)

(486,176

)

(746,390

)

Total

481,092

(961,794

)

(480,702

)

1.	STATUTORY INFORMATION

R.T. Rate 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.

Turnover

Turnover represents net invoiced sale of goods and work done, excluding value added tax together with commissions receivable and rental income receivable in respect of operating leases.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Freehold property

-

2% on cost

Plant and machinery

-

at variable rates on reducing balance

Motor vehicles

-

25% on reducing balance

Motor vehicle depreciation is in respect of assets leased to customers.

Stocks

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

The directors consider that consignment stocks of new vehicles held by the company on behalf of the Ford Motor Company, meet the criteria of Financial Reporting Standard 102 to be recognised as assets. Accordingly, such new vehicles are shown as stock in the accounts with a corresponding liability being shown within creditors falling due within one year.

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 statement of financial position date.

Deferred tax

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

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

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

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable for the year are charged to the profit and loss account.

Current asset investments

Current asset investments are stated at their mid-price at the statement of financial position date. Surpluses or deficits are recognised in the statement of comprehensive income.

Vehicles leased to customers

Vehicles leased to customers are included in fixed assets and depreciated in accordance with the policy stated above. Operating lease income is accounted for on a straight line basis and is included within the comprehensive income statement when receivable.

3.

TURNOVER

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

Turnover includes operating lease income totalling £30,475 (2019 - £27,308).

4.	OTHER OPERATING INCOME

2020

2019

£

£

Rents received

9,750

11,000

Rebates and commissions

15,604

-

Management charge income

14,877

6,821

CJRS Income

474,996

-

515,227

17,821

5.	EMPLOYEES AND DIRECTORS

2020

2019

£

£

Wages and salaries

2,985,870

2,971,418

Social security costs

349,058

341,997

Other pension costs

85,621

84,899

3,420,549

3,398,314

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

2020

2019

Sales

24

26

Operatives

27

27

Administrative

27

26

Directors

5

5

83

84

2020

2019

£

£

Directors' remuneration

486,520

412,493

Directors' pension contributions to money purchase schemes

22,025

22,025

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

Money purchase schemes

5

5

Information regarding the highest paid director is as follows:

2020

2019

£

£

Emoluments etc

167,046

135,129

Pension contributions to money purchase schemes

8,241

8,241

6.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2020

2019

£

£

Operating lease income

(30,475

)

(27,308

)

Depreciation - owned assets

177,519

176,124

(Profit)/loss on disposal of fixed assets

(14,919

)

16,565

Auditors' remuneration

21,000

21,000

Other non- audit services

28,000

20,500

Operating leases - land and buildings

201,549

198,377