W.R. Davies (2oo4) Limited - Accounts to registrar (filleted) - small 23.1.2

REGISTERED NUMBER: 05284390 (England and Wales)

AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

FOR

W.R. DAVIES (2OO4) LIMITED

Page

Company Information

1

Balance Sheet

2

Notes to the Financial Statements

3

DIRECTORS:

J R Davies

B R Pritchard

D J Conway

C J D Taylor

SECRETARY:

B R Pritchard

REGISTERED OFFICE:

W.R.Davies

Conwy Road

Llandudno Junction

Gwynedd

LL31 9BA

REGISTERED NUMBER:

05284390 (England and Wales)

AUDITORS:

D.R.E. & Co. (Audit) Limited

Kingsland House

39 Abbey Foregate

Shrewsbury

Shropshire

SY2 6BL

FIXED ASSETS

Tangible assets

5

417,421

534,510

CURRENT ASSETS

Stocks

6

3,223,497

2,315,929

Debtors

7

2,101,429

811,275

5,324,926

3,127,204

CREDITORS

Amounts falling due within one year

8

4,146,184

2,404,858

NET CURRENT ASSETS

1,178,742

722,346

TOTAL ASSETS LESS CURRENT LIABILITIES

1,596,163

1,256,856

CREDITORS

Amounts falling due after more than one year

9

-

(9,326

)

PROVISIONS FOR LIABILITIES

(61,148

)

(85,094

)

NET ASSETS

1,535,015

1,162,436

CAPITAL AND RESERVES

Called up share capital

12

1,025,000

1,025,000

Retained earnings

510,015

137,436

SHAREHOLDERS' FUNDS

1,535,015

1,162,436

The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered.

The financial statements were approved by the Board of Directors and authorised for issue on 28 April 2023 and were signed on its behalf by:

J R Davies - Director

1.	STATUTORY INFORMATION

W.R. Davies (2oo4) 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 principal place of business is Valley Drive, Stafford ST16 1NZ.

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" including the provisions of Section 1A "Small Entities" and the Companies Act 2006.

3.	ACCOUNTING POLICIES

Accounting convention

The financial statements have been prepared under the historical cost convention.

These financial statements are for the individual entity only.

The financial statements are presented in Sterling (£), rounded to the nearest £1.

Turnover

Turnover represents net invoiced sales of goods, excluding value added tax.

Vehicle sales are recognised at the earlier of the delivery of the vehicle to the customer or the point at which the customer becomes legally committed to purchasing the vehicle. Bonus income for the sale of vehicles is recognised in the period to which it relates for general fleet bonuses. Bonus income relating to specific vehicles is recognised when that vehicle is sold. The sale of parts and servicing is recognised when goods and services are provided.

Tangible fixed assets

Tangible fixed assets are stated at historic cost less accumulated depreciation. Cost includes the original purchase price, costs attributable to bringing the asset to its working condition for its intended use, dismantling and restoration costs and borrowing costs capitalised.

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter:

Improvements to leasehold property

- 7.5% straight line

Fixtures and fittings

- varying rates between 15% and 33% straight line

Motor vehicles

- varying rates between 15% and 33% straight line

Computer equipment

- 15%, 25% and 50% straight line

Stocks

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

Vehicles held on consignment stock from Nissan are included in the balance sheet, as it is considered that the company enjoys the benefits and carries the risks of ownership.

Financial instruments

The company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.

(i) Financial assets

Basic financial assets, including trade and other receivables, amounts owed by group undertakings and cash and bank balances, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Such assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in profit or loss.

If there is decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party, or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

(ii) Financial liabilities

Basic financial liabilities, including trade and other payables, bank and other loans, amounts due to group companies and finance leases, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

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 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

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss 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 company's pension scheme are charged to profit or loss in the period to which they relate.

4.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 34 (2021 - 34 ) .

5.	TANGIBLE FIXED ASSETS

Improvements

to

Fixtures

leasehold

and

Motor

Computer

property

fittings

vehicles

equipment

Totals

£

£

£

£

£

COST

At 1 January 2022

323,588

348,274

203,392

11,946

887,200

Additions

-

135,256

-

26,172

161,428

Disposals

-

(107,658

)

(158,392

)

-

(266,050

)

At 31 December 2022

323,588

375,872

45,000

38,118

782,578

DEPRECIATION

At 1 January 2022

84,388

215,796

46,809

5,697

352,690

Charge for year

24,269

64,124

6,750

8,411

103,554

Eliminated on disposal

-

(82,528

)

(8,559

)

-

(91,087

)

At 31 December 2022

108,657

197,392

45,000

14,108

365,157

NET BOOK VALUE

At 31 December 2022

214,931

178,480

-

24,010

417,421

At 31 December 2021

239,200

132,478

156,583

6,249

534,510

Fixed assets, included in the above, which are held under hire purchase contracts are as follows:

Fixtures

and

Motor

fittings

vehicles

Totals

£

£

£

COST

At 1 January 2022

84,839

45,000

129,839

Transfer to ownership

-

(45,000

)

(45,000

)

At 31 December 2022

84,839

-

84,839

DEPRECIATION

At 1 January 2022

46,712

38,250

84,962

Charge for year

12,381

6,750

19,131

Transfer to ownership

-

(45,000

)

(45,000

)

At 31 December 2022

59,093

-

59,093

NET BOOK VALUE

At 31 December 2022

25,746

-

25,746

At 31 December 2021

38,127

6,750

44,877

6.

STOCKS

31.12.22

31.12.21

£

£

Vehicles, parts and sundry stock

3,223,497

2,315,929

7.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.22

31.12.21

£

£

Trade debtors

562,295

145,637

Amounts owed by group undertakings

1,055,868

536,393

Other debtors

389,105

90,177

VAT

33,089

5,617

Prepayments

61,072

33,451

2,101,429

811,275

8.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.12.22

31.12.21

£

£

Bank loans and overdrafts (see note 10)

515,043

157,182

Hire purchase contracts

10,081

24,525

Trade creditors

3,275,844

1,997,249

Amounts owed to group undertakings

81,683

2,587

Tax

64,418

2,096

Social security and other taxes

24,660

25,585

Other creditors

83,358

73,294

Accrued expenses

91,097

122,340

4,146,184

2,404,858

9.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

31.12.22

31.12.21

£

£

Hire purchase contracts

-

9,326

10.

LOANS

An analysis of the maturity of loans is given below:

31.12.22

31.12.21

£

£

Amounts falling due within one year or on demand:

Bank overdrafts

515,043

157,182

11.	SECURED DEBTS

The following secured debts are included within creditors:

31.12.22

31.12.21

£

£

Bank overdrafts

515,043

157,182

Hire purchase contracts

10,081

33,851

Used vehicle stocking loan

2,957,882

1,608,243

3,483,006

1,799,276

Trade creditors relating to consigned vehicles are secured on the individual vehicle stocks to which they relate.

Included within trade creditors is the amount of £2,562,937 (2021: £776,059) due to Nissan (GB) Financial Services Ltd and £394,945 (2021: £832,184) due to Lombard North Central Plc in respect of vehicle stocking loans. Outstanding amounts are secured over the vehicle stock to which they relate.

Bank borrowing is secured by a debenture.

An unlimited multilateral guarantee exists in respect of bank borrowings - further details are given in the contingent liabilities note.

The hire purchase liabilities are secured on the asset to which they relate.

12.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

31.12.22

31.12.21

value:

£

£

1,025,000

Ordinary

£1

1,025,000

1,025,000

Each ordinary share is entitled to one vote in any circumstances.

13.	DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006

The Report of the Auditors was unqualified.

Aled Davies F.C.C.A. (Senior Statutory Auditor)

for and on behalf of D.R.E. & Co. (Audit) Limited

14.	CONTINGENT LIABILITIES

The company has an unlimited multilateral guarantee in respect of bank borrowings with the following related companies: W R Davies (Motors) Limited, W R Davies (Stafford) Limited, W R Davies Limited, W R Davies (Trading) Limited and Kirby Jones Limited.

As at the year end the potential contingent liability for W R Davies (2004) Limited amounted to £3,304,887 (2021: £3,287,603).

During a prior year the group companies entered into a Vehicle Stocking Loan Facility with Lombard North Central Plc. The cross guarantors within this agreement are W R Davies (Motors) Limited, W R Davies Limited, W R Davies (Stafford) Limited, Kirby Jones Limited, W R Davies (2004) Limited and W R Davies (Trading) Limited. As at the year end the contingent liability for W R Davies (2004) Limited amounted to £1,571,943 (2021: £3,567,726).

The total potential contingent liability for W R Davies (2004) Limited amounted to £4,876,830 (2021: £6,855,329).

15.	RELATED PARTY DISCLOSURES

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.

The company is a wholly owned subsidiary of W R Davies (Motors) Limited, whose registered office is Conwy Road, Llandudno Junction, Gwynedd, LL31 9BA.

W R Davies (Motors) Limited is the parent company of the smallest and largest group for which group accounts are drawn up and include W R Davies (2004) Limited. Group accounts are freely available from Companies House.

W R Davies (Motors) Limited is regarded by the directors as being the company's ultimate parent company.

The ultimate controlling party is J R Davies Esq, by virtue of a controlling shareholding in W R Davies (Motors) Limited.