Downeys Rental Limited iXBRL

Downeys Rental Limited

Financial Statements

for the financial year ended 31 December 2019

INDEPENDENT AUDITOR'S REPORT

to the Shareholders of Downeys Rental Limited

Report on the audit of the financial statements

Opinion

We have audited the financial statements of Downeys Rental Limited ('the company') for the financial year ended 31 December 2019 which comprise the Balance Sheet and the related notes to the financial statements, including a summary of significant accounting policies set out in note . The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” Section 1A (Small Entities).

In our opinion, when reporting in accordance with a fair presentation framework the financial statements:
-give a true and fair view of the state of the company's affairs as at 31 December 2019 and of its profit for the financial 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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and the Provisions Available for Audits of Small Entities, in the circumstances set out in Note 4 to the financial statements, 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.

Material uncertainty related to going concern

We have nothing to report in respect of the following matters in relation to which ISAs (UK) require us to report to you where:

the director's use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

the director has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Emphasis of Matter

There is a material uncertainty related to events or conditions that may cast significant doubt on the entity's ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.

In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosure made in note 3 to the financial statements concerning the company’s ability to continue as a going concern. The company's cumulative revenues in the first 2 months of the 2nd quarter of 2020 was significantly lower than their 2019 revenues in the same period with a major negative impact identified in April and May. The company’s operating results have declined significantly in 2020 and have been negative in April and May. There is significant uncertainity over the short term future of the industry and how long the crisis will continue. These conditions, along with the other matters explained in note 3 to the financial statements, indicate the existence of a material uncertainty which may cast significant doubt about the company’s ability to continue as a going concern. The financial statements do not include the adjustments that would result if the company was unable to continue as a going concern.

Other Information

The other information comprises the information included in the annual report other than the financial statements and our Auditor's Report thereon. The director is responsible for the other information. 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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

Opinion 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 Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Director's Report has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Director's Report.

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

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

certain disclosures of director's remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit; or

the director was not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the Director's Report.

Responsibilities of director for the financial statements

As explained more fully in the Statement of Director's Responsibilities, the director is 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 they determine is 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 director is 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 management either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Auditor's 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 an Auditor's Report 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is contained in the appendix to this report, located at page 6, which is to be read as an integral part of our report.

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 an auditor's report 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.

__________________________________

Richard Gray (Senior Statutory Auditor)

for and on behalf of

PGR ACCOUNTANTS LIMITED

Chartered Accountants and Statutory Auditor

Unit 2 Channel Wharf

21 Old Channel Road

Belfast

Co. Antrim

BT3 9DE

Northern Ireland

11 September 2020

Downeys Rental Limited

APPENDIX TO THE INDEPENDENT AUDITOR'S REPORT

Further information regarding the scope of our responsibilities as auditor

As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

Conclude on the appropriateness of the director's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditor's Report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditor's Report. However, future events or conditions may cause the company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Downeys Rental Limited

Company Number: NI636209

BALANCE SHEET

as at 31 December 2019

		2019	2018
	Notes	£	£

Fixed Assets

Tangible assets

3,716,297

2,277,478

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Current Assets

Debtors

1,119,640

459,240

Cash and cash equivalents

408,142

267,566

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1,527,782

726,806

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Creditors: Amounts falling due within one year

(4,658,938)

(2,754,769)

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Net Current Liabilities

(3,131,156)

(2,027,963)

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Total Assets less Current Liabilities

585,141

249,515

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Capital and Reserves

Called up share capital

100

100

Profit and Loss Account

585,041

249,415

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Shareholders' Funds

585,141

249,515

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The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies' regime and in accordance with the provisions of FRS 102 Section 1A (Small Entities).

The company has taken advantage of the exemption under section 444 not to file the Profit and Loss Account and Director's Report.

Approved by the Director and authorised for issue on 11 September 2020


________________________________
Ian McCulla
Director

Downeys Rental Limited

NOTES TO THE FINANCIAL STATEMENTS

for the financial year ended 31 December 2019

GENERAL INFORMATION

Downeys Rental Limited is a company limited by shares incorporated in Northern Ireland. Unit 2, The Office Dock, 21 Old Channel Road, Belfast, Co. Antrim, BT3 9DE, Northern Ireland is the registered office. The principal activity of the business during the year was the rental of motor vehicles. The financial statements have been presented in Pound Sterling (£) which is also the functional currency of the company.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the company's financial statements.

Statement of compliance

The financial statements of the company for the year ended 31 December 2019 have been prepared in accordance with the provisions of FRS 102 Section 1A (Small Entities) and the Companies Act 2006.

Basis of preparation

The financial statements have been prepared on the going concern basis and in accordance with the historical cost convention except for certain properties and financial instruments that are measured at revalued amounts or fair values, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

Turnover

Turnover comprises the invoice value of goods and services supplied by the company, exclusive of trade discounts and value added tax.

Tangible fixed assets and depreciation

Tangible fixed assets are stated at cost or at valuation, less accumulated depreciation. The charge to depreciation is calculated to write off the original cost or valuation of tangible fixed assets, less their estimated residual value, over their expected useful lives as follows:

Plant and machinery

15% Straight line

Fixtures, fittings and equipment

15% Straight line

Motor vehicles

12% Reducing Balance

The carrying values of tangible fixed assets are reviewed annually for impairment in periods if events or changes in circumstances indicate the carrying value may not be recoverable.

Trade and other debtors

Trade and other debtors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method less impairment losses for bad and doubtful debts except where the effect of discounting would be immaterial. In such cases the receivables are stated at cost less impairment losses for bad and doubtful debts.

Borrowing costs

Borrowing costs relating to the acquisition of assets are capitalised at the appropriate rate by adding them to the cost of assets being acquired. Investment income earned on the temporary investment of specific borrowings pending their expenditure on the assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

Trade and other creditors

Trade and other creditors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest rate method, unless the effect of discounting would be immaterial, in which case they are stated at cost.

Taxation and deferred taxation

Current tax represents the amount expected to be paid or recovered in respect of taxable profits for the financial year and is calculated using the tax rates and laws that have been enacted or substantially enacted at the Balance Sheet date.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more tax in the future, or a right to pay less tax in the future. Timing differences are temporary differences between the company's taxable profits and its results as stated in the financial statements. Deferred tax is measured on an undiscounted basis at the tax rates that are anticipated to apply in the periods in which the timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date.

Ordinary share capital

The ordinary share capital of the company is presented as equity.

GOING CONCERN

After the reporting period, the COVID-19 crisis had a significant impact on the business and overall motor rental industry. As a result of these effects, cumulative revenue in the first 2 months of the 2nd quarter of 2020 was significantly lower than 2019 revenue in the same period with the major negative impact identified in April and May. The company’s operating results have declined significantly in 2020 and have been negative in April and May. The company's banker has been flexible with finance arrangements and has extended the overdraft facility while offering payment breaks on the loans. The entity has been able to claim grant relief from the government by furloughing the majority of staff.

The director has considered the impact of the current COVID-19 environment on the business for the next 12 months, the viability period and the longer term. Whilst the situation is constantly evolving, making scenario planning difficult, we have considered a number of impacts on sales, profits and cash flows. We have assumed that our operations remain open and that we will continue to be able to sell our products to customers.

The director is aware of the risk that Brexit presents to the business but does not consider that this will have a significant impact on trading performance.

After considering the strong reserves, the bank and government support and future outlook of the industry, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the company continues to adopt the going concern basis in preparing the annual report and accounts.

PROVISIONS AVAILABLE FOR AUDITS OF SMALL ENTITIES

In common with many other businesses of our size and nature, we use our auditors to prepare and submit tax returns to Her Majesty's Revenue and Customs and to assist with the preparation of the financial statements.

EMPLOYEES

The average monthly number of employees, including director, during the financial year was 32, (2018 - 28).

2019

2018

Number

Number

Sales

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6.	TANGIBLE FIXED ASSETS
		Plant and	Fixtures,	Motor	Total
		machinery	fittings and	vehicles
			equipment
		£	£	£	£
	Cost
	At 1 January 2019	3,997	-	2,427,223	2,431,220
	Additions	11,735	46,141	1,971,832	2,029,708
	Disposals	-	-	(243,384)	(243,384)
		─────────	─────────	─────────	─────────
	At 31 December 2019	15,732	46,141	4,155,671	4,217,544
		─────────	─────────	─────────	─────────
	Depreciation
	At 1 January 2019	-	-	153,742	153,742
	Charge for the financial year	2,170	1,256	366,095	369,521
	On disposals	-	-	(22,016)	(22,016)
		─────────	─────────	─────────	─────────
	At 31 December 2019	2,170	1,256	497,821	501,247
		─────────	─────────	─────────	─────────
	Net book value
	At 31 December 2019	13,562	44,885	3,657,850	3,716,297
		═════════	═════════	═════════	═════════
	At 31 December 2018	3,997	-	2,273,481	2,277,478
		═════════	═════════	═════════	═════════


7.	DEBTORS	2019	2018
		£	£

	Trade debtors	91,235	115,604
	Amounts owed by group companies	449,337	-
	Other debtors	-	100
	Director's current account (Note )	2,557	2,557
	Taxation	11,042	4,540
	Prepayments and accrued income	565,469	336,439
		─────────	─────────
		1,119,640	459,240
		═════════	═════════


8.	CREDITORS	2019	2018
	Amounts falling due within one year	£	£

	Bank overdrafts	-	27
	Trade creditors	690,570	526,416
	Amounts owed to group companies	3,948,615	2,031,265
	Taxation	996	104,295
	Accruals	18,757	92,766
		─────────	─────────
		4,658,938	2,754,769
		═════════	═════════

CAPITAL COMMITMENTS

The company had no material capital commitments at the financial year-ended 31 December 2019.

10.

RELATED PARTY TRANSACTIONS

The company has availed of the exemption under FRS 102 in relation to the disclosure of transactions with group companies.

11.

PARENT AND ULTIMATE PARENT COMPANY

The company regards Downeys (Holdings) Limited as its parent company.

The companys ultimate parent undertaking is Ian McCulla.

The address of Ian McCulla is 39 Portaferry Road, Newtownards, BT23 8NN.

Ian McCulla is regarded as both the controlling party and the ultimate controlling party.

The parent of the largest group in which the results are consolidated is Downeys (Holdings) Limited.

Downeys (Holdings) Limited is registered in Northern Ireland.

12.

POST-BALANCE SHEET EVENTS

The COVID-19 outbreak has developed rapidly in 2020, with a significant number of infections. Measures taken by various governments to contain the virus have
affected economic activity and the company's business in various material ways:
- Due to government measures taken, we had to close our premises as of March 2020.
- The reduction of economic activity and requirement to close our stores for all our employees to work from home has resulted
in a significant reduction in sales/productivity.

As a result of these effects, our cumulative revenues in the first 2 months of the 2nd quarter of 2020 was significantly lower than our 2019 revenues in the same period with the major negative impact identified in April and May. The company’s operating results have declined significantly in 2020 and have been negative in April.

Our liquidity has been negatively impacted, which required us to attract additional funding from our banks under the current facilities.