C P G (Wales) PLC - Limited company accounts 20.1

REGISTERED NUMBER: 01880557 (England and Wales)

C.P.G. (WALES) PLC

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2021

Page

Company Information

1

Strategic Report

2

to

4

Report of the Directors

5

to

6

Report of the Independent Auditors

7

to

10

Income Statement

11

Other Comprehensive Income

12

Balance Sheet

13

Statement of Changes in Equity

14

Notes to the Financial Statements

15

to

27

DIRECTORS:

G A Humphries

P A Humphries

REGISTERED OFFICE:

Corner Park Garages

Llantrisant Road

Mwyndy

Pontyclun

CF72 8YR

REGISTERED NUMBER:

01880557 (England and Wales)

SENIOR STATUTORY AUDITOR:

Brian Garland

AUDITORS:

Gerald Thomas

Registered Auditors

Chartered Accountants

3 New Mill Court

Swansea Enterprise Park

Swansea

SA7 9FG

The directors present their strategic report for the year ended 30 June 2021.

REVIEW OF BUSINESS

The key financial highlights are as follows:

2021

2020*

2018

2017

2016

2015

('000s)

('000s)

('000s)

('000s)

('000s)

('000s)

Turnover

£23,226

£32,466

£24,206

£18,916

£19,873

£15,984

Turnover growth

(28.5%)

34.0%

28.0%

(4.8%)

24.3%

(10.9%)

Gross profit margin

7.0%

5.6%

5.1%

5.3%

4.9%

5.6%

Operating profit

£477

£236

£318

£101

£291

£261

Net assets

£1,659

£1,594

£1,481

£1,380

£1,842

£1,924

* 2019/20 is an 18-month accounting period.

Gross profit percentage is the company's key performance indicator, as well as the company's increase in turnover. The gross profit margin has increased to 7.0% from 5.6% in the prior period. This is primarily due to the change in stock financing arrangements, reducing purchasing costs to the company. Vehicle preparation costs also continue to be closely monitored and the buying process being more focused on vehicles that require the minimum of preparation costs has enabled the company to improve its margin.

The directors believe that the business has continued to perform well in the period of review, particular in view of the impact of the coronavirus pandemic which has impacted the business through enforced closures and fluctuations in the demand for used cars.

The directors believe that paying down debt and retaining cash within the business will leave the company well placed to take advantage of new opportunities as they arise.

The directors continue to be pleased with the improvements and efficiencies being implemented within the business and look forward to these contributing to improved financial performance in the forthcoming year.

PRINCIPAL RISKS AND UNCERTAINTIES

The company is subject to certain risks which are monitored closely by the directors.

Price risk

The company is exposed to price risk as a result of its operations, in particular in relation to fluctuations in the price of used cars. The directors manage this risk by continuously monitoring the movements in pricing as well as agreeing a vehicle stocking facility arrangement. The arrangements will be continually monitored by the directors.

Credit risk

The company's principal financial assets are cash at bank and trade debtors. The company's credit risk is primarily attributable to its trade debtors.The directors actively monitor and manage the credit risk associated with the company's customers.

Liquidity risk

The company actively maintains a mixture of long-term and short-term debt finance that is designed to ensure the company has sufficient available funds for its operations.

PRINCIPAL RISKS AND UNCERTAINTIES (CONTINUED)

Cash flow risk

Exposure to adverse movements in interest rates is not considered by the directors as a significant risk to the company. The company's trading activities are all within the United Kingdom and therefore is not exposed to the risks of fluctuations in exchange rates during the year.

Covid-19 pandemic

The main economic risk remains the uncertainties following the Coronavirus pandemic and the impacts of future lockdown restrictions on the company. The directors continue to monitor and respond to the risks as they arise, including the implementation of new working arrangements and obtaining government support where required, to ensure that the company can continue to trade.

FINANCIAL INSTRUMENTS

The company's principal financial instruments comprise bank balances, loans, trade debtors and creditors and finance lease agreements. The main purpose of these instruments is to raise funds for the company's operations and to finance the company's operations.

In respect of loans, these comprise related party companies and loans from financial institutions. The interest rate on the loans from financial institutions is variable, but the monthly repayments are fixed. The company manages liquidity risk by ensuring there are sufficient funds to meet the repayments. Loans to and from related party companies are not interest bearing and are repayable on demand.

The company is a lessee in respect of financed leased assets. The liquidity risk in respect of these is managed in the same way as loans.

Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit risk. Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

FUTURE DEVELOPMENTS

The pandemic was not something that could have been anticipated, nor planned for. The directors have responded to the risks arising as a result of the pandemic, mitigating the impact of government lockdowns through click and collect trading. The company has since been able to return to normal trading through its garages and showrooms as lockdown restrictions ease.

Going forward the impact of the virus continues to remain uncertain, however it is hoped that the successful vaccine rollout will reduce any impacts during the winter period. The directors are confident that the company will continue to achieve strong trading levels in future periods, and will respond to any challenges that arise when required.

GOING CONCERN

The directors have carried out a review of the company's ability to continue as a going concern, in light of the ongoing Coronavirus pandemic and its impacts on customers, employees and the economy as a whole.

It has been noted that despite the impacts from the pandemic, a profit has been reported in this financial year. Future trading levels are inherently uncertain as the continued effects of the pandemic on the company and its customers is not known. However having assessed its current financial position and future outlook, the directors consider that the company will have sufficient resources to continue trading as a going concern over the next 12 months.

ON BEHALF OF THE BOARD:

G A Humphries - Director

7 October 2021

The directors present their report with the financial statements of the company for the year ended 30 June 2021.

PRINCIPAL ACTIVITIES

The principal activities of the company in the year under review were those of the buying and selling of motor vehicles and the sale of fuel, oil and forecourt sales.

DIVIDENDS

The total distribution of dividends for the year ended 30 June 2021 will be £ 122,308 .

DIRECTORS

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

G A Humphries

P A Humphries

DISCLOSURE IN THE STRATEGIC REPORT

Included in the company's strategic report is a review of the business performance, a description of the principal risks and uncertainties facing the company, a description of the financial instruments of the company and details of important events affecting the company since the year end.

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;

-	state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

-	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 ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

ON BEHALF OF THE BOARD:

G A Humphries - Director

7 October 2021

Opinion

We have audited the financial statements of C.P.G. (Wales) PLC (the 'company') for the year ended 30 June 2021 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 30 June 2021 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the 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 five, 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:

Detecting Irregularities

The objectives of our audit in relation to fraud are as follows:

- to identify and assess the risks of material misstatement of the financial statements due to fraud;

- to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses;

- and to respond appropriately to fraud or suspected fraud identified during the audit.

However, the primary responsibility for the prevention and detection of fraud rests with the director.

Auditor's approach to assessing the risks of material mis-statement due to irregularities, including fraud

We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant frameworks which are directly relevant to specific assertions in the financial statements are those that relate to the reporting framework (FRS 102 and the Companies Act 2006) and the relevant tax compliance regulations in the UK.

We assessed the risks of material misstatement in respect of fraud and considered the extent to which non-compliance with laws and regulations might have a material effect on the financial statements.

Audit procedures designed to respond to the risks of non-compliance with laws and regulations

Based on the results of our risk assessment, we designed our audit procedures to identify non-compliance with such laws and regulations identified above. We made enquiries of management to understand how the company is complying with those frameworks. Audit procedures performed by the engagement team also included a review of the financial statements disclosures to underlying supporting documentation.

Audit procedures designed to respond to the risks of fraud

We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur, by meeting with management to understand where they considered there was susceptibility to fraud.

Based on the results of our risk assessment we designed our audit procedures to identify and to address material misstatements in relation to fraud.

The COVID-19 working environment increases the inherent risk of fraud. Our audit procedures have been tailored to address this risk, with areas of audit focus identified as:

- Going concern risk;

- Government supports schemes fraudulently being claimed;

- Potentially more opportunities for fraud with more remote working.

As well as adopting an attitude of professional scepticism, we have obtained information for use in identifying the risk of fraud when performing risk assessment procedures and performed the following procedures in light of the risk of fraud :

- Discussion amongst the engagement team regarding the susceptibility of the client to fraud;

- Consideration of the risk of fraud when documenting and testing internal controls;

- Enquiring of management how they: assess the risk of fraud; identify and respond to the risks of fraud;

- Enquiring of management and directors whether they have any knowledge of actual or suspected fraud;

Management override of controls

We considered the risk of fraud through management override and, in response, we incorporated testing of manual journal entries into our audit approach. The audit engagement team performed journal entry testing using a risk-based approach and evaluating whether there was evidence of bias, with a focus on any journals indicating large or unusual transactions and journals processed for before and after the accounting reference date.

Considerations around likelihood of detection

Due to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

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.

Brian Garland (Senior Statutory Auditor)

for and on behalf of Gerald Thomas

Registered Auditors

Chartered Accountants

3 New Mill Court

Swansea Enterprise Park

Swansea

SA7 9FG

7 October 2021

TURNOVER

4

23,226,502

32,466,331

Cost of sales

21,612,064

30,654,577

GROSS PROFIT

1,614,438

1,811,754

Administrative expenses

1,762,022

2,784,146

(147,584

)

(972,392

)

Other operating income

5

624,378

1,264,871

OPERATING PROFIT

7

476,794

292,479

Creditor balance written off

8

-

456,259

Loss on investment impairment

8

-

(513,016

)

476,794

235,722

Interest payable and similar expenses

9

245,113

73,041

PROFIT BEFORE TAXATION

231,681

162,681

Tax on profit

10

43,911

49,531

PROFIT FOR THE FINANCIAL YEAR

187,770

113,150

PROFIT FOR THE YEAR

187,770

113,150

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

187,770

113,150

FIXED ASSETS

Tangible assets

12

144,134

164,049

CURRENT ASSETS

Stocks

13

3,734,141

80,130

Debtors

14

2,524,285

2,863,069

Cash at bank and in hand

865,767

238,357

7,124,193

3,181,556

CREDITORS

Amounts falling due within one year

15

5,157,223

1,199,802

NET CURRENT ASSETS

1,966,970

1,981,754

TOTAL ASSETS LESS CURRENT LIABILITIES

2,111,104

2,145,803

CREDITORS

Amounts falling due after more than one year

16

(347,796

)

(443,629

)

PROVISIONS FOR LIABILITIES

21

(104,018

)

(108,346

)

NET ASSETS

1,659,290

1,593,828

CAPITAL AND RESERVES

Called up share capital

22

1,126,500

1,126,500

Retained earnings

23

532,790

467,328

SHAREHOLDERS' FUNDS

1,659,290

1,593,828

The financial statements were approved by the Board of Directors and authorised for issue on 7 October 2021 and were signed on its behalf by:

G A Humphries - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2019

1,126,500

354,178

1,480,678

Changes in equity

Total comprehensive income

-

113,150

113,150

Balance at 30 June 2020

1,126,500

467,328

1,593,828

Changes in equity

Dividends

-

(122,308

)

(122,308

)

Total comprehensive income

-

187,770

187,770

Balance at 30 June 2021

1,126,500

532,790

1,659,290

1.	STATUTORY INFORMATION

C.P.G (Wales) Plc. is a public limited company, incorporated in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

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

The accounting period for the 2019/20 financial statements has been extended to 18 months due to a group restructure. As a result comparative amounts presented in the financial statements (including the related notes) are not entirely comparable.

2.	STATEMENT OF COMPLIANCE

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.

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared on the historical cost basis except for the modification to a fair value basis for certain fixed assets, as stated in the accounting policies below.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows.

Significant judgements and estimates

In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors which are considered to be relevant. Actual results may differ from these estimates.

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

Recoverability of related party debtors

The directors assess the recoverability of related party debtor balances at the reporting date and make provisions against balances where deemed necessary. The directors review the financial position of related party companies to assess their ability to repay the debt. At the balance sheet date related party debtors totalled £2,490,745 (2020: £2,807,661) and no provision has been made.

Turnover

Turnover represents amounts derived from operating activities and is stated after trade discounts, other sales taxes and value added tax.

Other income represents sales commissions and rents received.

Revenue recognition

Revenue from shop sales and sales of fuel and oil are recognised at the point of sale of goods to the customer.

Revenue from the sale of motor vehicles is recognised when the significant risks and rewards of ownership have been transferred to the buyer.

Commissions are recognised when they are payable to the company. Rents received are recognised in the period to which they relate.

Tangible fixed assets

Fixed assets are included at cost less accumulated depreciation, with the exception of freehold property which is included at market value. Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Property improvements

-

10 - 33% on cost

Plant and machinery

-

10 - 25% on cost

Fixture and fittings

-

20% on cost

Motor vehicles

-

25% on reducing balance

No depreciation is provided in respect of freehold land and buildings. This is due to only land being included within the asset group, all buildings on the land is included within property improvements. The directors have adopted a policy of revaluation with regard to freehold buildings and they consider that the provision of depreciation is not required in addition to the policy of revaluation.

Government grants

Government grants are recognised as assets at such time that there is reasonable assurance that the company will comply with the conditions attached to the grant and that the grant will be received. Grants are measured at the fair value of the asset receivable.

Grants are recognised as income once any performance related conditions are met. Where grants are received in advance of the revenue recognition criteria being met, they are recognised as deferred income.

Grants received from the government for furloughed employees are recognised in profit or loss in the period in which the related expense is incurred.

The company has also benefitted from government assistance in the form of government backed loans.

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Net realisable value is based on estimated selling price.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, 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

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.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to the profit and loss account on a straight line basis over the period of the lease.

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet and depreciated over their estimated useful lives.

The interest element of these obligations is charged to the profit and loss account over the relevant period. The capital element of the future payments is treated as a liability.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the pension scheme are charged to the profit and loss account in the period to which they relate.

Going concern

In preparing the financial statements, the directors have considered the current financial position of the company and its likely future cashflows.

The directors have noted an impact to the company as a result of the Coronavirus pandemic, with closures during the lockdown resulting in lost revenues. However it is noted that the net current assets and net assets have both increased in the year. The company also has a cash at bank balance of £865,767 at 30 June 2021.

The directors have assessed the risks arising from the pandemic and obtained government support where required. The directors have also considered the impact of Brexit on the company. In the opinion of the directors, these challenges will not adversely affect the ability of the company to continue trading for the foreseeable future.

At the date of signing the financial statements, after considering those areas which could give rise to financial exposure, including the impact of the Coronavirus pandemic, the directors are satisfied that the company will have adequate resources to continue its operations for the foreseeable future. Accordingly the directors have adopted the going concern basis in preparing the financial statements.

Financial instruments

Financial assets and financial liabilities are recognised when the company becomes a party to the contractual provisions of the instrument.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Financial assets and liabilities

All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a finance transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Debt instruments that are classified as payable or receivable within one year are measured at the undiscounted amount of the cash or other consideration expected to be paid or received, net of impairment.

Financial assets are derecognised when and only when the contractual rights to the cash flows from the financial asset expire or are settled, the company transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or the company, despite having retained some significant risks and rewards of ownership, has transferred control of the asset to another party and the other party has the practical ability to sell the asset in its entirety to an unrelated third party and is able to exercise that ability unilaterally and without needing to impose additional restrictions on the transfer.

Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires.

Provisions and contingent liabilities

Provisions are recognised when the company has a present obligation as a result of a past event, it is probable that the company will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Otherwise, material contingent liabilities are disclosed unless the transfer of economic benefits is remote. Contingent assets are only disclosed if an inflow of economic benefits is probable.

Fixed asset investments

Investments in the shares of subsidiary companies, joint ventures and minority interests are stated at cost, less any provision for permanent diminution in value. Market value cannot reliably be ascertained, as the shares are unlisted.

4.

TURNOVER

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

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

PERIOD

1/1/19

YEAR ENDED

TO

30/6/21

30/6/20

£

£

Motor vehicle sales

21,342,732

29,732,919

Fuel and oil sales

1,677,781

2,479,205

Shop sales

205,989

254,207

23,226,502

32,466,331

5.	OTHER OPERATING INCOME

PERIOD

1/1/19

YEAR ENDED

TO

30/6/21

30/6/20

£

£

Commissions Received

541,507

1,014,082

Management fees

-

500

Government grants

82,871

250,289

624,378

1,264,871

6.	EMPLOYEES AND DIRECTORS

PERIOD

1/1/19

YEAR ENDED

TO

30/6/21

30/6/20

£

£

Wages and salaries

873,823

1,401,243

Social security costs

90,002

128,894

Other pension costs

18,870

24,456

982,695

1,554,593

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

PERIOD

1/1/19

YEAR ENDED

TO

30/6/21

30/6/20

Administration

6

6

Operations

30

28

Directors

2

2

38

36

PERIOD

1/1/19

YEAR ENDED

TO

30/6/21

30/6/20

£

£

Directors' remuneration

17,260

25,230

Directors' pension contributions to money purchase schemes

101

11

7.	OPERATING PROFIT

The operating profit is stated after charging:

PERIOD

1/1/19

YEAR ENDED

TO

30/6/21

30/6/20

£

£

Hire of plant and machinery

10,374

10,380

Depreciation - owned assets

48,581

83,964

Auditors' remuneration

18,500

16,500

8.	EXCEPTIONAL ITEMS

PERIOD

1/1/19

YEAR ENDED

TO

30/6/21

30/6/20

£

£

Creditor balance written off

-

456,259

Loss on investment impairment

-

(513,016

)

-

(56,757

)