Mechanical Breakdown And General Insuran - Limited company accounts 16.3

REGISTERED NUMBER: 01478159 (England and Wales)

Report of the Directors and

Financial Statements

for the Year Ended 31 March 2016

for

Mechanical Breakdown And General

Insurance Services Limited

Page

Company Information

1

Report of the Directors

2

Report of the Independent Auditors

3

Profit and Loss Account

5

Balance Sheet

6

Notes to the Financial Statements

7

DIRECTORS:

D Brock

R Clark

N S Howard

A D McPhee

SECRETARY:

R Clark

REGISTERED OFFICE:

Cobalt Business Exchange

Cobalt Park Way

Wallsend

Tyne and Wear

NE28 9NZ

REGISTERED NUMBER:

01478159 (England and Wales)

AUDITORS:

Walker Dunnett & Co

Chartered Accountants & Statutory Auditor

29 Commercial Street

Dundee

DD1 3DG

The directors present their report with the financial statements of the company for the year ended 31 March 2016.

DIRECTORS

A D McPhee has held office during the whole of the period from 1 April 2015 to the date of this report.

Other changes in directors holding office are as follows:

D Brock - appointed 4 February 2016

R Clark - appointed 4 February 2016

N S Howard - appointed 4 February 2016

R M Shand - resigned 4 February 2016

DIRECTORS' RESPONSIBILITIES STATEMENT

The directors are responsible for preparing 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 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.

AUDITORS

The auditors, Walker Dunnett & Co, will be proposed for re-appointment at the forthcoming Annual General

Meeting.

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006

relating to small companies.

ON BEHALF OF THE BOARD:

R Clark - Director

30 March 2017

We have audited the financial statements of Mechanical Breakdown And General Insurance Services Limited

for the year ended 31 March 2016 on pages five to twelve. The financial reporting framework that has been

applied in their preparation is applicable law and the Financial Reporting Standard for Smaller Entities

(effective January 2015) (United Kingdom Generally Accepted Accounting Practice applicable to Smaller

Entities).

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.

Respective responsibilities of directors and auditors

As explained more fully in the Directors' Responsibilities Statement set out on page two, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient

to give reasonable assurance that the financial statements are free from material misstatement, whether

caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to

the company's circumstances and have been consistently applied and adequately disclosed; the

reasonableness of significant accounting estimates made by the directors; and the overall presentation of the

financial statements. In addition, we read all the financial and non-financial information in the Report of the

Directors to identify material inconsistencies with the audited financial statements and to identify any

information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge

acquired by us in the course of performing the audit. If we become aware of any apparent material

misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 March 2016 and of its profit for the year then ended;

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

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

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Report of the Directors for the financial year for which the financial

statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

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; or

-	the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Directors.

Andrew Walker MA CA (Senior Statutory Auditor)

for and on behalf of Walker Dunnett & Co

Chartered Accountants & Statutory Auditor

29 Commercial Street

Dundee

DD1 3DG

30 March 2017

TURNOVER

1,295,456

1,321,055

Cost of sales

348,116

328,258

GROSS PROFIT

947,340

992,797

Administrative expenses

710,768

866,652

OPERATING PROFIT

2

236,572

126,145

Interest receivable and similar income

3,527

3,722

PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION

240,099

129,867

Tax on profit on ordinary activities

3

48,428

34,086

PROFIT FOR THE FINANCIAL YEAR

191,671

95,781

FIXED ASSETS

Intangible assets

5

-

Tangible assets

6

20,795

19,294

20,795

19,294

CURRENT ASSETS

Debtors

7

1,770,168

743,208

Cash at bank and in hand

8

654,074

1,394,620

2,424,242

2,137,828

CREDITORS

Amounts falling due within one year

9

1,496,335

1,379,037

NET CURRENT ASSETS

927,907

758,791

TOTAL ASSETS LESS CURRENT
LIABILITIES

948,702

778,085

PROVISIONS FOR LIABILITIES

10

1,141

2,195

NET ASSETS

947,561

775,890

CAPITAL AND RESERVES

Called up share capital

11

76

Capital redemption reserve

12

24

Profit and loss account

12

947,461

775,790

SHAREHOLDERS' FUNDS

947,561

775,890

The financial statements have been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies and with the Financial Reporting Standard for Smaller Entities (effective January 2015).

The financial statements were approved by the Board of Directors on 30 March 2017 and were signed on its
behalf by:

R Clark - Director

D Brock - Director

1.	ACCOUNTING POLICIES

Accounting convention

The financial statements have been prepared under the historical cost convention and in accordance

with the Financial Reporting Standard for Smaller Entities (effective January 2015).

Exemption from preparing a cash flow statement

Exemption has been taken from preparing a cash flow statement on the grounds that the company

qualifies as a small company.

Turnover

Turnover comprises revenue recognised by the company in respect of insurance administrative

services supplied during the year, exclusive of Value Added Tax and trade discounts.

Administration fees are recognised in full at inception of that specific policy with the exception of one

scheme (long term warranty covering non traditional residential buildings) where turnover is prepaid

and recognised monthly over the term of the policy in line with agreed practice.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2009, is being amortised evenly over its estimated useful life of five years.

Tangible fixed assets

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

Plant and machinery etc

-

25% on reducing balance and 20% on reducing balance

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at

the balance sheet date.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at

the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of

exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at

the operating result.

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.

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 the profit and loss account in the period to which they

relate.

2.	OPERATING PROFIT

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

31.3.16

31.3.15

£

Depreciation - owned assets

5,857

5,087

Loss on disposal of fixed assets

1,632

1,018

Auditors' remuneration

6,000

4,600

Foreign exchange differences

(9,540

)

14,505

Pension costs

40,000

1,110

Directors' remuneration and other benefits etc

120,812

132,848

3.

TAXATION

Analysis of the tax charge

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

31.3.16

31.3.15

£

Current tax:

UK corporation tax

49,482

33,899

Adjustments in respect of prior periods

-

51

Total current tax

49,482

33,950

Deferred tax

(1,054

)

136

Tax on profit on ordinary activities

48,428

34,086

4.

DIVIDENDS

31.3.16

31.3.15

£

Ordinary shares of £1 each

Final

20,000

5.	INTANGIBLE FIXED ASSETS

Goodwill

£

COST

At 1 April 2015

and 31 March 2016

350,000

AMORTISATION

At 1 April 2015

and 31 March 2016

350,000

NET BOOK VALUE

At 31 March 2016

-

At 31 March 2015

-

6.	TANGIBLE FIXED ASSETS

Plant and

machinery

etc

£

COST

At 1 April 2015

61,947

Additions

9,000

Disposals

(12,300

)

At 31 March 2016

58,647

DEPRECIATION

At 1 April 2015

42,653

Charge for year

5,857

Eliminated on disposal

(10,658

)

At 31 March 2016

37,852

NET BOOK VALUE

At 31 March 2016

20,795

At 31 March 2015

19,294

7.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.3.16

31.3.15

£

Trade debtors

1,031,069

728,926

Amounts owed by group undertakings

712,237

-

Other debtors

26,862

14,282

1,770,168

743,208

8.	CASH AT BANK AND IN HAND

31.3.16

31.3.15

£

Bank account

320,941

1,079,620

Bank balances re floats owed

to insurance underwriters

333,133

315,000

654,074

1,394,620

9.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.3.16

31.3.15

£

Bank loans and overdrafts

98,527

123,103

Trade creditors

541,466

419,171

Taxation and social security

156,992

90,915

Other creditors

699,350

745,848

1,496,335

1,379,037

Included in other creditors is a liability of £342,732 (2015: £315,000) being floats from insurance

underwriters held by the company.

10.	PROVISIONS FOR LIABILITIES

31.3.16

31.3.15

£

Deferred tax

1,141

2,195

Deferred

tax

£

Balance at 1 April 2015

2,195

Accelerated capital allowances

(1,054

)

Balance at 31 March 2016

1,141

11.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

31.3.16

31.3.15

value:

£

76

Ordinary

£1

76

12.

RESERVES

Profit

Capital

and loss

redemption

account

reserve

Totals

£

At 1 April 2015

775,790

24

775,814

Profit for the year

191,671

Dividends

(20,000

)

(20,000

)

At 31 March 2016

947,461

24

947,485

13.	PENSION COMMITMENTS

The company operates a defined contributions pension scheme. The assets of the scheme are held

separately from those of the company in an independently administered fund. The pension cost

charge represents contributions payable by the company to the fund and amounted to £40,000 (2015 -

£1,110). Contributions totalling £Nil (2015 - £Nil) were payable to the fund at the balance sheet date

and are included in creditors.

14.	ULTIMATE PARENT COMPANY

Aros Holdings Limited is regarded by the directors as being the company's ultimate parent company.

On 4 February 2016 Aros Holdings Limited acquired the whole of the share capital of the company and

is now regarded as its ultimate parent company.

15.	RELATED PARTY DISCLOSURES

Auto Warranty Limited

Auto Warranty Limited, a company in which R M Shand & A D McPhee are directors and shareholders

charged the company commissions in the amount of £nil (2015 - £24,000). The balance due to Auto

Warranty Limited as the end of the year was £nil (2015 - £75,569) and was included in trade creditors.

31.3.16

31.3.15

£

Amount due to related party at the balance sheet date

-

75,469

Genesis Special Risks Limited

A D McPhee and R M Shand are shareholders in Genesis Special Risks Limited, a company in which

A D McPhee, R Clark and D Brock are also directors. During the year , the company was charged

brokerage fees in the amount of £92,042 (2015 - £34,223).

The balance payable to Genesis Special Risks Limited at the year end was £7,963 (2015: £4,821) and

is included in trade creditors.

31.3.16

31.3.15

£

Amount due to related party at the balance sheet date

7,963

4,821

A D McPhee

Director

Included in other creditors was a loan due to A D McPhee. The loan was repaid in full during the year.

31.3.16

31.3.15

£

Amount due to related party at the balance sheet date

-

7,954

R M Shand

Director

Included in other creditors was a loan due to R M Shand. The loan was repaid in full during the year.

31.3.16

31.3.15

£

Amount due to related party at the balance sheet date

-

2,766

Warranty Logistics Management Limited

A fellow group company

In the period after the acquisition of the company by Aros Holdings Limited, Warranty Logistics

Management Limited paid administration fees to the company of £18,756. An adjustment to the

administration fees of £19,007 was made covering some fees paid prior to the acquisition.

The company made a loan to Warranty Logistics Management Limited of £750,000. The loan does not

bear interest and no repayment terms have been agreed.

The net balance due from Warranty Logistics Management Limited is included in amounts due from

group undertakings.

31.3.16

31.3.15

£

Amount due to related party at the balance sheet date

712,237

-

16.	ULTIMATE CONTROLLING PARTY

The company is under the control of Aros Holdings Limited and its directors.