Euro Commercials (South Wales) Limited - Limited company accounts 20.1

REGISTERED NUMBER: 01459115 (England and Wales)

Euro Commercials (South Wales) Limited

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 31st December 2020

Page

Company Information

1

Strategic Report

2

Report of the Directors

6

Report of the Independent Auditors

8

Statement of Comprehensive Income

11

Balance Sheet

12

Statement of Changes in Equity

13

Cash Flow Statement

14

Notes to the Cash Flow Statement

15

Notes to the Financial Statements

16

Directors:

J Carne

G O Edwards

A G Hole

B Kidd

D Salway

D N O Williams

Registered office:

Ipswich Road

CARDIFF

CF23 9AQ

Registered number:

01459115 (England and Wales)

Senior statutory auditor:

Clive Edwards

Auditors:

Haines Watts Wales LLP, Statutory Auditors

7 Neptune Court

Vanguard Way

Cardiff

CF24 5PJ

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

Business review

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

Euro Commercials (South Wales) Limited continued with its principal activity being a Mercedes Benz commercial vehicle dealership. This entails offering the sale of New and Used Light commercial vehicles (LCV) and Heavy goods vehicles (HGV), the servicing of LCV's and HGV's and the sale of manufacturer approved parts for LCV's and HGV's.

The 2020 trading year was heavily impacted by Covid-19 with overall turnover reducing by 18% compared to 2019. However, due to strong, proactive and focussed management of the business we can report that profit performance was in contrast to turnover, with an improving profit before taxation result of £208k, being an increase of 105% vs 2019. This statistic is a great overall summary of the achievement of the business but for a true understanding of the years challenges and achievements we have commented in a quarterly timeline below.

Q1 - All departments were exceeding previous years performances and also beating the budgeted targets for 2020. This however ground to a harsh halt mid- March with the immediate impact of Covid-19.

Q2 - We experienced the height of the trading impact of Covid-19 in Q2, with our Retail Sales showrooms closing to the public and the implementation of the necessary but restrictive trading measures to ensure the safety of all employees, customers and suppliers. Turnover was impacted immediately from a sales and aftersales perspective. This required the business to review the processes and measures across all departments to ultimately adapt to the new trading landscape. This review regretfully resulted in staff redundancies (implemented in July), both voluntary and involuntary. At this time the business also introduced salary reductions across the workforce. These difficult but necessary measures ensured the business was in as strong a position as possible to weather the immediate issue of Covid-19 and also adapt to the fast-changing automotive sector landscape. All of these measures were supported by our dedicated workforce who continued to provide excellent service to our customers throughout this tumultuous time, with specific focus on keeping emergency services, home delivery networks and local/national/international hauliers in motion.

Q3 - We saw a phased return of custom. Aftersales customers were starting to operate their fleets again and customer confidence returned to the vehicle sales market (although Used sales remained steady throughout with contactless sales). This change in market confidence and a clearer outlook for the year allowed the business to remove the necessary salary reductions implemented in Q2.

Q4 - There was further gain in market confidence resulting in sales within the aftersales business returning to pre Covid levels. However, vehicle sales continued to suffer due to restricted stock supply from our manufacturing partner.

The board want to note that all of the above has been achieved with the exceptional support and efforts of the entire workforce. It is a true testament to the grit, determination and loyalty of the Euros team that we ended the year in a strong position.

2021 has continued the positive trend of Q4 2020 in aftersales performance but has experienced a very strained vehicle sales market where new stock supply is lower than customer demand and used vehicle stock is scarce. The business continues to adapt to the fast changing marketplace and is forecasting an increased profit position in 2021.

Principal risks and uncertainties

Commercial Relationships with suppliers and customers:

Euro Commercials (South Wales) Ltd has close working relationships with a number of key suppliers and customers. The loss of these relationships would have a material impact on the results.

To alleviate such scenarios, we have enhanced our Business Development and Customer Services team to focus on maintaining our high level of customer care. We are also actively canvassing new opportunities and relationships to ensure stability and growth.

Coronavirus (Covid-19) Pandemic Risk:

The pandemic has impacted on the UK economy and the business since March'20. We are uncertain how long this will continue although there are positive steps being made in respect of vaccine roll outs. Whilst we cannot predict how long we will continue to be faced with the impact of Covid, we will continue to operate the business in the positive and forward looking manner that has successfully steered us through 2020 to date. This has been achieved by the implementation of new processes, working practices, controls and measures, supported by enhanced live data reporting. This has resulted in operational decisions being made efficiently and effectively to minimise cost and disruption to further safeguard the business, its employees, suppliers and customers. This will also ensure we are able to keep all of our front-line supporting service sites open, even during lockdown scenarios.

At the time of writing this report we are continuing to experience daily business impact as a result of Covid but are able to manage the business accordingly by utilising the enhanced processes, working practices, controls and measures.

Price Risk:

Euro Commercials (South Wales) Ltd operate in a highly competitive sector whilst also subject to manufacturer driven price increases.

To manage such risk Euro Commercials (South Wales) Ltd has the policy of passing on price increases to its customers. Additionally, the business focuses and invests heavily on the training and development of staff and systems to ensure that the business has the ability to provide suitable choice and a high level of service to its customers, ensuring continuous custom. The business also continually works to streamline its cost base to ensure that it remains competitive across all divisions.

Credit Risk:

Euro Commercials (South Wales) Ltd manage its credit exposure using robust and established processes. All new customers are subjected to a detailed review using third party credit checks and thereon monitored on a live basis using third party software. Credit limit movement is reported daily and customer credit limits are reviewed by the Finance Director on a monthly basis.

Liquidity Risk:

The business operates using an overdraft facility, third party stock funding lines along with main shareholder support when required. These facilities have been managed effectively and utilised on average to 50% during 2021.

Euro Commercials (South Wales) Ltd manages its cash closely utilising short, medium and long term modelling to ensure sufficient liquidity.

The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.

Section 172(1) statement

Stakeholder engagement

The Board of Directors of Euro Commercials (South Wales) Limited consider both individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in s172(1)(a)-(f) of the Act) in the decisions taken during the year ended 31 December 2020.

Euro Commercials (South Wales) Ltd has been trading for 41 years as a Mercedes Benz commercial vehicle franchise. The Business is proud of its history as a privately-owned and run business. The Operational Board consists of 3 Directors and a Non-Executive Board of Directors, 2 of whom are the founders of Euro Commercials (South Wales) Ltd. The Board are widely experienced in the commercial vehicle sector and have over 190 years of collective experience within the Mercedes Benz Commercial Vehicle industry. The Board meet monthly to discuss short, medium, and long-term objectives. These objectives cover all operational and strategic aspects of the business. The key objective of the Board is to maintain its position as being a respected and trusted employer to its valued workforce, customer to our supply partners, and supplier to our valued customers.

The following explains how we engage with the key stakeholders who help us make Euro Commercials (South Wales) Ltd a success in the present and also in the future:

Our Employees

The Board recognises that the employees of Euro Commercials (South Wales) Ltd are the secret to our success and our most prized resource. The Operational Board meet with the workforce at regular intervals throughout the year to discuss business performance and future developments, and actively encourage interaction and feedback. During these meetings there is a strong focus on employee reward and recognition, and this is also promoted throughout the business on a day to day basis, ensuring that all members feel valued by the Board and also their co-workers. We take pride in this culture and continue to develop it utilising the key values of Euro Commercials (South Wales) Ltd with the goal of being the employer of choice in South Wales.

Paramount to our success is the ongoing investment in the training and development of our employees to ensure they are the best they can be and, in turn, reward our customers with the fantastic service levels that has seen our Aftersales performance improve year on year for the last 5 years. This improved performance places us in the top quartile with our dealer peers for customer service levels.

The safety and wellbeing of our employees is of utmost importance to us and the continued focus and requirement for this has been further supported by the appointment of a dedicated Health & Safety officer.

The business has made significant investment in facilities, machinery and equipment in 2021 with further investment planned throughout 2021/2022 and beyond. The most notable investments in 2021 being the full internal refurbishment of Swansea site and the yard resurface at our Cardiff service centre.

Our Customers & Suppliers

We work very closely with the manufacturer, Mercedes Benz, so we can continue to offer an industry leading product and service to our customers and ultimately be the commercial vehicle supplier and repairer of choice. We take pride in our reputation of supplying a high level of service to a broad range of businesses, both local and national, and continue to build on this reputation with our ethos of being a fair trading business with both customers and suppliers. This ongoing objective requires continuous focus and investment in employee personal development and role specific training along with the latest technology and facilities.

We have maintained the adapted working practices during the Covid pandemic of 2020 to ensure the customer still has the level of service needed and expected in a safe manner. This has resulted in changes in the customer interaction points throughout the business from service reception through to new vehicle deliveries throughout the UK. These have been implemented with safety in mind and with the sole objective of "keeping businesses moving".

Our Community & Environment

We are a local business mainly serving the South Wales community. We actively support local charities and events and run monthly charitable donation schemes with our employees. We actively engage and comply with environmental legislation and pursue ways in which to limit our impact on the environment.

Business Conduct and Corporate Governance

As the Board of Directors, our intention is to behave responsibly and ensure that the management operate the business in a responsible manner, operating within the high standards of business conduct and good governance expected for a business such as ours and in doing so, will contribute to the delivery of our plan. The intention is to nurture our reputation, through both the construction and delivery of our plan, that reflects our responsible behaviour. As the Board of Directors, our intention is to behave responsibly towards our shareholders and treat them fairly and equally, so they too may benefit from the successful delivery of our plan.

Equal Opportunities

Euro Commercials (South Wales) Ltd does not discriminate in employment on the basis of race, colour, religion, sex (including pregnancy and gender identity), national origin, political affiliation, sexual orientation, marital status, disability, genetic information, age, membership in an employee organization, retaliation, parental status, military service, or other non-merit factor. It is policy that any persons shall be considered for employment, career development and promotion on the basis of their aptitude and abilities in common with all employees.

On behalf of the board:

J Carne - Director

30th September 2021

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

Dividends

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

Directors

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

J Carne

G O Edwards

A G Hole

B Kidd

D Salway

D N O Williams

Streamlined energy and carbon reporting

Euro Commercials (South Wales) Ltd understands that its trading activities and the industry that it operates within has an impact on the environment.

To ensure we minimise our impact on the environment the business has a strong and proactive view on embracing and investing in new technologies, whilst also continuously improving internal processes to reduce energy consumption.

This continued focus has seen a number of investments and initiatives driven in, with particular focus on:

-Electricity consumption - All sites have been upgraded to LED lighting.

-Gas Consumption - New efficient boilers installed.

-Vehicle travel - Electric charging points installed at all customer facing sites along with electric vehicles brought into the company vehicle fleet. We have also reduced internal travel by utilising new systems and technologies for meetings.

-Recycling/Waste - The business has adopted new paperless working practices and enhanced its focussing on recycling waste materials throughout the business.

tC02e

Total emissions generated through combustion of gas

59.34

Total emissions generated through use of purchased electricity

140.35

Total emissions generated through use of other fuels

57.14

Total emissions generated through business travel

436.92

Total Gross emissions

693.75

Intensity ratio

3.96 per employee

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), 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;

-	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.

Auditors

The auditors, Haines Watts Wales LLP, Statutory Auditors, will be proposed for re-appointment at the forthcoming Annual General Meeting.

On behalf of the board:

J Carne - Director

30th September 2021

Opinion

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

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31st December 2020 and of its profit for the year then ended;

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

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

Basis for opinion

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

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

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

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

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

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

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page six, 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:

Our planning procedures identify the legal and regulatory frameworks applicable to the operations and financial

statements of the company. These are reviewed internally with the audit team including relevant industry experience

and expectations as well as externally with the client management. The key laws and regulations we considered in this context were the UK Companies Act 2006, UK GAAP (FRS 102) and relevant tax legislation.

Once identified, we assess the risks of material misstatements in relation to the laws and regulations, irregularities,

including fraud and adjust our testing accordingly. Our audit procedures include:

- Discussing with Directors and management which areas of the business they believe to be more susceptible to fraud,and whether they have any knowledge or suspicion of fraudulent activities.

- Discussing with Directors and Management the legal and regulatory obligations of the business and whether they have any knowledge or suspicion of non compliance.

- Obtaining an understanding of the key controls put in place by the company to address risks identified, assessing the effectiveness of those and discussing how these are maintained and monitored internally.

- Assessing the risk of management override and review and testing of journal entries made into the accounting system.

- Challenging assumptions and judgements made by the company in relation to the significant accounting estimates

employed in the preparation of the financial statements.

Despite the audit being planned and conducted in accordance with ISAs (UK) there remains an unavoidable risk that material misstatements in the financial statements may not be detected owing to inherent limitations of the audit, and that by their very nature, any such instances of fraud or irregularities likely involve collusion, forgery, intentional

misrepresentation, or the override of internal controls.

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.

Clive Edwards (Senior Statutory Auditor)

for and on behalf of Haines Watts Wales LLP, Statutory Auditors

7 Neptune Court

Vanguard Way

Cardiff

CF24 5PJ

30th September 2021

Turnover

3

49,096,100

59,791,384

Cost of sales

(46,574,015

)

(56,930,629

)

Gross profit

2,522,085

2,860,755

Administrative expenses

(2,849,952

)

(2,491,373

)

(327,867

)

369,382

Other operating income

679,304

-

Operating profit

351,437

369,382

Interest payable and similar expenses

5

(143,518

)

(267,727

)

Profit before taxation

6

207,919

101,655

Tax on profit

7

(23,823

)

(26,000

)

Profit for the financial year

184,096

75,655

Other comprehensive income

-

-

Total comprehensive income for the year

184,096

75,655

Fixed assets

Tangible assets

8

2,034,370

2,763,562

Investments

9

22,430

22,430

2,056,800

2,785,992

Current assets

Stocks

10

11,976,752

12,826,000

Debtors

11

4,380,917

6,746,000

Cash at bank and in hand

333,397

221,000

16,691,066

19,793,000

Creditors

Amounts falling due within one year

12

(16,589,798

)

(20,399,244

)

Net current assets/(liabilities)

101,268

(606,244

)

Total assets less current liabilities

2,158,068

2,179,748

Creditors

Amounts falling due after more than one year

13

(148,401

)

(378,000

)

Provisions for liabilities

17

(95,219

)

(71,396

)

Net assets

1,914,448

1,730,352

Capital and reserves

Called up share capital

18

650,000

650,000

Retained earnings

19

1,264,448

1,080,352

Shareholders' funds

1,914,448

1,730,352

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

J Carne - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1st January 2019

500,000

1,004,697

1,504,697

Changes in equity

Issue of share capital

150,000

-

150,000

Total comprehensive income

-

75,655

75,655

Balance at 31st December 2019

650,000

1,080,352

1,730,352

Changes in equity

Total comprehensive income

-

184,096

184,096

Balance at 31st December 2020

650,000

1,264,448

1,914,448

Cash flows from operating activities

Cash generated from operations

1

669,538

2,054,124

Interest paid

(87,073

)

(210,727

)

Interest element of hire purchase payments paid

(56,445

)

(57,000

)

Tax paid

(24,689

)

26,000

Net cash from operating activities

501,331

1,812,397

Cash flows from investing activities

Purchase of tangible fixed assets

(123,312

)

(778,397

)

Net cash from investing activities

(123,312

)

(778,397

)

Cash flows from financing activities

New loans in year

46,042

-

Capital repayments in year

(266,809

)

(153,000

)

Amount introduced by directors

31,145

-

Share issue

-

150,000

Net cash from financing activities

(189,622

)

(3,000

)

Increase in cash and cash equivalents

188,397

1,031,000

Cash and cash equivalents at beginning of year

2

145,000

(886,000

)

Cash and cash equivalents at end of year

2

333,397

145,000

1.	Reconciliation of profit before taxation to cash generated from operations

2020

2019

£

£

Profit before taxation

207,919

101,655

Depreciation charges

657,613

708,525

Finance costs

143,518

267,727

1,009,050

1,077,907

Decrease in stocks

1,044,783

1,525,000

Decrease/(increase) in trade and other debtors

2,365,083

(229,783

)

Decrease in trade and other creditors

(3,749,378

)

(319,000

)

Cash generated from operations

669,538

2,054,124

2.	Cash and cash equivalents

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

Year ended 31st December 2020

31.12.20

1.1.20

£

£

Cash and cash equivalents

333,397

221,000

Bank overdrafts

-

(76,000

)

333,397

145,000

Year ended 31st December 2019

31.12.19

1.1.19

£

£

Cash and cash equivalents

221,000

-

Bank overdrafts

(76,000

)

(886,000

)

145,000

(886,000

)

3.	Analysis of changes in net debt

At 1.1.20

Cash flow

At 31.12.20

£

£

£

Net cash

Cash at bank and in hand

221,000

112,397

333,397

Bank overdrafts

(76,000

)

76,000

-

145,000

188,397

333,397

Debt

Finance leases

(705,000

)

266,809

(438,191

)

Debts falling due within 1 year

(80,000

)

(57,630

)

(137,630

)

(785,000

)

209,179

(575,821

)

Total

(640,000

)

397,576

(242,424

)

1.	Statutory information

Euro Commercials (South Wales) 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.

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.

The financial statements have been prepared on a going concern basis. The Directors have reviewed and

considered relevant information, including the annual budget and future cash flows in making their assessment. In particular, in response to the COVID-19 pandemic, the Directors have tested their cash flow analysis to take into account the impact on their business of possible scenarios brought on by the impact of COVID-19,alongside the measures that they can take to mitigate the impact. Based on these assessments, given the measures that could be undertaken to mitigate the current adverse conditions, and the current resources available, the Directors have concluded that they can continue to adopt the going concern basis in preparing the annual report and accounts.

Turnover

Turnover represents amounts chargeable, net of value added tax, in respect of the sale and repair of motor

vehicles, associated bonuses and commissions and the sale of vehicle parts.

Turnover from the sale of vehicles is recognised when the significant risks and rewards of ownership are

transferred to the buyer. In most cases, the transfer of the risks and rewards of ownership coincides with the

transfer of the legal title or the passing of possession to the buyer.

Turnover from the sale of services is recognised by reference to the stage of completion of the transaction.

Turnover from commissions and bonuses are recognised on an accrual basis in accordance with the substance of the relevant agreement.

Tangible fixed assets

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

Long leasehold

-

10% on cost

Fixtures and fittings

-

10%-25% on cost

Motor vehicles

-

20% on cost

Stocks

Stock and work in progress are valued at the lower of cost and net realisable value, after due regard for

obsolete and slow moving stocks. Cost is stated net of any provision required after review at year end and Net realisable value is based on selling price less anticipated costs to completion and selling costs.

The ownership of consignment stock passes from the manufacturer to the company when full payment for

vehicles is made.The value of consignment stock is shown separately in the notes to the balance sheet as both current assets and as creditors due within one year.

Demonstrator vehicles deemed to have a long useful economic life are transferred to fixed assets at cost. Vehicles are transferred to stock at Net book value, prior to sale.

Parts stocks are stated at the lower of cost and estimated selling price. Cost is determined using the average cost method.

Financial instruments

Financial instruments are classified and accounted for, according to the substance of the contractual

arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is

any contract that evidences a residual interest in the assets of the company after deducting all of its

liabilities. Financial liabilities are derecognised when the company's contractual obligations expire or are

discharged & cancelled.

Taxation

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

Current or deferred taxation assets and liabilities are not discounted.

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

Deferred tax

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

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

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

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.

Rentals paid under operating leases are charged to profit or loss 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 profit or loss in the period to which they relate.

Government grants

Government grants represents income receivable in relation to the UK government COVID-19 job retention

scheme. This is recognised in the period in which it becomes receivable.

Trade debtors

Trade debtors are amounts due from customers in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. A provision for the impairment of trade

debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid

investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of

change in value.

Trade creditors

Trade creditors 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 the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve

months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months

after the reporting date, they are presented as non-current liabilities.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the company's accounting policies, the directors are required to make judgements,

estimates and assumptions about the carrying amount 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 that 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 affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgements in applying the Company's accounting policies

The following are the critical judgements, apart from those involving estimations (which are dealt with

separately below), that the directors have made in the process of applying the Company's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

Stock Provision

It is necessary to consider the recoverability of the cost of stock and the associated provisioning required. When calculating the stock provision management considers the nature and condition of the stock, as well as assessing external factors such as market condition and applying assumptions around the stock saleability.

Impairment of Debtors

An allowance for the impairment of trade debtors is considered. This requires management's best estimate of impairment to specific debts on the basis of objective evidence that is available.

3.

Turnover

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

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

2020

2019

£

£

Sale of Goods

43,416,687

54,302,000

Sale of Services

5,679,413

5,489,384

49,096,100

59,791,384

4.	Employees and directors

2020

2019

£

£

Wages and salaries

5,071,999

5,033,000

Social security costs

466,227

482,000

Other pension costs

122,417

112,000

5,660,643

5,627,000

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

2020

2019

Part and Services

131

135

Sales

29

29

Administration

15

15

175

179