Company Registration No. 00624778 (England and Wales)
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
COMPANY INFORMATION
Director
Mr A W F Prebble
Secretary
Ms D Small
Company number
00624778
Registered office
Row Ash
Botley Road
Shedfield
Southampton
Hampshire
SO32 2HL
Auditor
HJS Accountants Limited
Chartered Accountants and Statutory Auditors
12 -14 Carlton Place
Southampton
Hampshire
England
SO15 2EA
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
CONTENTS
Page
Strategic report
1
Director's report
2
Director's responsibilities statement
3
Independent auditor's report
4 - 5
Profit and loss account
6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 25
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2017
- 1 -
The director presents the strategic report for the year ended 31 March 2017.
Fair review of the business
We are pleased to report that Silverlake Garage (Motor Salvage) Limited has had another profitable year. The key figures are as follows:-
- Turnover has increased overall by 19.67%.
- The gross profit percentage has increased from 34.91% in 2016 to 42.57% this year.
- The gross profit has increased by 45.91%
- The profit before tax has increased by 928.38% and the profit after tax has increased by 565.65%.
- Development work has continued on the new building.
Future developments
The outlook for the future is good, due to contracts that are currently in place.
The company has maintained a high level of expense on advertising in the year to 31 March 2017. The benefits of this should continue to bolster turnover throughout 2017 and into 2018.
Principal risks and uncertainties
The management of the business and the execution of the company's strategy are subject to a number of risks.
The key business risks and uncertainties affecting the company are considered to relate to competition from both national and independent retailers, employee retention and product availability, and also the price of scrap metal.
Mr A W F Prebble
Director
20 December 2017
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 MARCH 2017
- 2 -
The director presents his annual report and financial statements for the year ended 31 March 2017.
Principal activities
The principal activity of the company continued to be that of sale of used cars and light motor vehicles.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr A W F Prebble
Results and dividends
The results for the year are set out on page 6.
Ordinary dividends were paid amounting to £498,674. The director does not recommend payment of a final dividend.
Auditor
The auditors, HJS Accountants Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr A W F Prebble
Director
20 December 2017
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2017
- 3 -
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:
-
• select suitable accounting policies and then apply them consistently;
-
• make judgements and accounting estimates that are reasonable and prudent;
-
• state whether applicable UK 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 director is 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. He is 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.
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
- 4 -
We have audited the financial statements of Silverlake Garage (Motor Salvage) Limited for the year ended 31 March 2017 set out on pages 6 to 25. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland".
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.
Respective responsibilities of director and auditor
As explained more fully in the Director's Responsibilities Statement set out on page 3, the director is 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 director; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report 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 2017 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.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and the Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
- 5 -
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.
Angela Trainor (Senior Statutory Auditor)
for and on behalf of HJS Accountants Limited
20 December 2017
Chartered Accountants and Statutory Auditors
12 -14 Carlton Place
Southampton
Hampshire
England
SO15 2EA
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2017
- 6 -
2017
2016
Notes
£
£
Turnover
3
15,193,688
12,696,632
Cost of sales
(8,702,460)
(8,263,739)
Gross profit
6,491,228
4,432,893
Administrative expenses
(4,662,346)
(4,290,678)
Other operating income
81,169
81,445
Operating profit
4
1,910,051
223,660
Interest receivable and similar income
7
422
195
Interest payable and similar expenses
8
(48,991)
(40,653)
Profit before taxation
1,861,482
183,202
Taxation
9
(635,633)
58,254
Profit for the financial year
1,225,849
241,456
The profit and loss account has been prepared on the basis that all operations are continuing operations.
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2017
- 7 -
2017
2016
£
£
Profit for the year
1,225,849
241,456
Other comprehensive income
-
-
Total comprehensive income for the year
1,225,849
241,456
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
BALANCE SHEET
AS AT
31 MARCH 2017
31 March 2017
- 8 -
2017
2016
Notes
£
£
£
£
Fixed assets
Tangible assets
11
4,830,886
4,064,537
Investment properties
12
1,945,067
1,779,376
6,775,953
5,843,913
Current assets
Stocks
13
729,378
629,159
Debtors
14
706,584
545,199
Cash at bank and in hand
738,181
390,169
2,174,143
1,564,527
Creditors: amounts falling due within one year
15
(1,966,155)
(1,490,457)
Net current assets
207,988
74,070
Total assets less current liabilities
6,983,941
5,917,983
Creditors: amounts falling due after more than one year
16
(912,677)
(1,053,318)
Provisions for liabilities
19
(493,952)
(180,219)
Net assets
5,577,312
4,684,446
Capital and reserves
Called up share capital
22
2,000
2,000
Other reserves
1,502,571
1,336,880
Profit and loss reserves
4,072,741
3,345,566
Total equity
5,577,312
4,684,446
The financial statements were approved and signed by the director and authorised for issue on 20 December 2017
Mr A W F Prebble
Director
Company Registration No. 00624778
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2017
- 9 -
Share capital
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2015
2,000
1,257,280
3,294,060
4,553,340
Year ended 31 March 2016:
Profit and total comprehensive income for the year
-
-
241,456
241,456
Dividends
10
-
-
(189,950)
(189,950)
Transfers
-
79,600
-
79,600
Balance at 31 March 2016
2,000
1,336,880
3,345,566
4,684,446
Year ended 31 March 2017:
Profit and total comprehensive income for the year
-
-
1,225,849
1,225,849
Dividends
10
-
-
(498,674)
(498,674)
Transfers
-
165,691
-
165,691
Balance at 31 March 2017
2,000
1,502,571
4,072,741
5,577,312
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2017
- 10 -
1
Accounting policies
Company information
Silverlake Garage (Motor Salvage) Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Row Ash, Botley Road, Shedfield, Southampton, Hampshire, SO32 2HL.
1.1
Accounting convention
These financial statements for the year ended 31 March 2017
are the
first
financial statements of Silverlake Garage (Motor Salvage) Limited prepared in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland. The date of transition to FRS 102 was 1 April 2015. The reported financial position and financial performance for the previous period are not affected by the transition to FRS 102.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared on the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
A
t the time of approving the financial statements
,
t
he director has a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for the sale of used vehicles, vehicle parts and scrap metal. Turnover is also shown net of VAT and sales discounts.
The company also receives rental income from investment properties.
Where vehicles and parts have not been sold at the period end, this is shown as stock.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings Freehold
2% Straight line
Land and buildings Leasehold
1% Straight line
Plant and machinery
25% Reducing balance
Fixtures, fittings & equipment
15% Reducing balance
Motor vehicles
25% Reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
1
Accounting policies
(Continued)
- 11 -
1.5
Investment properties
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure
. Subsequently it is measured
at fair value a
t
the reporting end date.
The surplus or deficit on revaluation is recognised in the profit and loss account.
Where fair value cannot be achieved without undue cost or effort, investment property is accounted for as tangible fixed assets.
1.6
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of replacement cost and cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
1
Accounting policies
(Continued)
- 12 -
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method 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.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
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 a 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.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
1
Accounting policies
(Continued)
- 13 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from
fellow group companies and preference shares that are classified as debt, 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.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts 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 creditors are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value though profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
1
Accounting policies
(Continued)
- 14 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair
value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the profit and loss account so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
Rentals payable under operating leases,
including
any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 15 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is 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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
For parts stock valuation, the company has a record of the number of vehicles currently held, then they take the average weight of a car and multiply these figures together to get an total weight of all parts stock held. The total weight of the cars is then valued using the scrap value that they would receive.
For salvage stock valuation, the cars are held at cost.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2017
2016
£
£
Turnover
Used salvage
7,489,451
6,555,274
Parts
5,790,894
4,641,111
Auction
888,296
632,814
Other
160,381
110,961
Storage and recovery
864,666
756,472
15,193,688
12,696,632
Other significant revenue
Interest income
422
195
Turnover analysed by geographical market
2017
2016
£
£
United Kingdom
14,645,948
12,120,677
EC
547,740
575,955
15,193,688
12,696,632
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 16 -
4
Operating profit
2017
2016
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
6,250
6,250
Depreciation of owned tangible fixed assets
170,918
155,796
Depreciation of tangible fixed assets held under finance leases
275,796
245,765
(Profit)/loss on disposal of tangible fixed assets
(54,401)
2,773
Cost of stocks recognised as an expense
8,402,887
8,019,994
Operating lease charges
40,687
39,311
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2017
2016
Number
Number
Administration
7
7
Parts
37
35
Salvage
9
7
Yard
3
3
Depollution
13
11
Transport
19
17
Outside
2
2
Export
3
3
93
85
Their aggregate remuneration comprised:
2017
2016
£
£
Wages and salaries
2,099,110
1,865,679
Social security costs
189,958
157,621
Pension costs
13,396
12,073
2,302,464
2,035,373
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 17 -
6
Director's remuneration
2017
2016
£
£
Remuneration for qualifying services
52,000
53,000
Company pension contributions to defined contribution schemes
352
366
52,352
53,366
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2016 - 1).
7
Interest receivable and similar income
2017
2016
£
£
Interest income
Interest on bank deposits
422
195
8
Interest payable and similar expenses
2017
2016
£
£
Interest on finance leases and hire purchase contracts
25,249
25,797
Other interest on financial liabilities
23,357
14,856
Other interest
385
-
48,991
40,653
9
Taxation
2017
2016
£
£
Current tax
UK corporation tax on profits for the current period
279,599
-
Adjustments in respect of prior periods
-
(43,871)
Total current tax
279,599
(43,871)
Deferred tax
Origination and reversal of timing differences
304,319
27,918
Changes in tax rates
9,414
-
Tax losses carried forward
42,301
(42,301)
Total deferred tax
356,034
(14,383)
Total tax charge/(credit)
635,633
(58,254)
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
9
Taxation
(Continued)
- 18 -
The actual charge/(credit) for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2017
2016
£
£
Profit before taxation
1,861,482
183,202
Expected tax charge based on the standard rate of corporation tax in the UK of 20.00% (2016: 20.00%)
372,296
36,640
Tax effect of expenses that are not deductible in determining taxable profit
92,990
2,816
Tax effect of utilisation of tax losses not previously recognised
(42,301)
-
Unutilised tax losses carried forward
-
12,270
Change in unrecognised deferred tax assets
-
(14,383)
Adjustments in respect of prior years
-
(43,871)
Permanent capital allowances in excess of depreciation
264,648
(17,855)
Adjustments in respect of financial assets
-
555
Research and development tax credit
(41,120)
(34,426)
Profit on sale of tangible assets
(10,880)
-
Taxation for the year
635,633
(58,254)
10
Dividends
2017
2016
£
£
Interim paid
498,674
189,950
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 19 -
11
Tangible fixed assets
Land and buildings Freehold
Land and buildings Leasehold
Plant and machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 April 2016
3,364,751
17,988
2,611,193
66,123
954,120
7,014,175
Additions
127,927
-
700,260
3,697
383,777
1,215,661
Disposals
-
-
(95,100)
-
(11,000)
(106,100)
At 31 March 2017
3,492,678
17,988
3,216,353
69,820
1,326,897
8,123,736
Depreciation and impairment
At 1 April 2016
497,599
17,988
1,734,401
39,408
660,241
2,949,637
Depreciation charged in the year
67,662
-
257,598
4,192
117,262
446,714
Eliminated in respect of disposals
-
-
(92,861)
-
(10,640)
(103,501)
At 31 March 2017
565,261
17,988
1,899,138
43,600
766,863
3,292,850
Carrying amount
At 31 March 2017
2,927,417
-
1,317,215
26,220
560,034
4,830,886
At 31 March 2016
2,867,151
-
876,792
26,715
293,879
4,064,537
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
11
Tangible fixed assets
(Continued)
- 20 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2017
2016
£
£
Plant and machinery
316,842
456,357
Motor vehicles
514,896
206,497
Freehold and investment properties
4,804,996
4,646,527
5,636,734
5,309,381
Depreciation charge for the year in respect of leased assets
275,796
245,765
12
Investment property
2017
£
Fair value
At 1 April 2016
1,779,376
Net gains or losses through fair value adjustments
165,691
At 31 March 2017
1,945,067
Investment property comprises of two cottages, two bungalows, a field and some woodland.
The fair value of the field and woodland has been arrived at by obtaining current market value per acre on Google. The values have been adjusted using the House Price Retail Index to arrive at the value at a particular date.
13
Stocks
2017
2016
£
£
Raw materials and consumables
729,378
629,159
729,378
629,159
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 21 -
14
Debtors
2017
2016
Amounts falling due within one year:
£
£
Trade debtors
439,052
255,485
Corporation tax recoverable
-
52,968
Other debtors
51,523
18,013
Prepayments and accrued income
216,009
176,432
706,584
502,898
Deferred tax asset (note 20)
-
42,301
706,584
545,199
15
Creditors: amounts falling due within one year
2017
2016
Notes
£
£
Bank loans and overdrafts
17
179,141
169,463
Obligations under finance leases
18
280,186
228,808
Trade creditors
517,154
447,939
Corporation tax
270,502
-
Other taxation and social security
298,173
268,612
Other creditors
47,731
107,918
Accruals and deferred income
373,268
267,717
1,966,155
1,490,457
16
Creditors: amounts falling due after more than one year
2017
2016
Notes
£
£
Bank loans and overdrafts
17
414,319
594,979
Obligations under finance leases
18
498,358
458,339
912,677
1,053,318
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 22 -
17
Loans and overdrafts
2017
2016
£
£
Bank loans
593,460
764,442
Payable within one year
179,141
169,463
Payable after one year
414,319
594,979
The bank loans are secured by a fixed charge on the company's freehold property and investment properties, together with a fixed and floating charge over the company's assets.
The bank loans are repayable in instalments and the final repayments are due in March 2020, June 2020, December 2020, and January 2021.
The rate of interest on the loans is 3.90%, 1.25%, 2.00%, and 2.60% above the base rate, therefore currently 4.15%, 1.50%, 2.25%, 2.85%.
18
Finance lease obligations
2017
2016
Future minimum lease payments due under finance leases:
£
£
Within one year
280,186
228,808
In two to five years
498,358
458,339
778,544
687,147
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
19
Provisions for liabilities
2017
2016
Notes
£
£
Deferred tax liabilities
20
493,952
180,219
493,952
180,219
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 23 -
20
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
Assets
Assets
2017
2016
2017
2016
Balances:
£
£
£
£
Accelerated capital allowances
493,952
180,219
-
-
Tax losses
-
-
-
42,301
493,952
180,219
-
42,301
2017
Movements in the year:
£
Liability at 1 April 2016
137,918
Charge to profit or loss
356,034
Liability at 31 March 2017
493,952
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
21
Retirement benefit schemes
2017
2016
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
13,396
12,073
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 24 -
22
Share capital
2017
2016
£
£
Ordinary share capital
Issued and fully paid
160 Ordinary of £1 each
160
160
1,740 Ordinary A of £1 each
1,740
1,740
100 Ordinary B of £1 each
100
100
2,000
2,000
The company has three classes of Ordinary shares which carry no right to fixed income.
They are Ordinary, Ordinary A and Ordinary B shares.
The company has in issue 160 Ordinary shares of £1 each, classified as equity. These shares carry voting rights.
The company has in issue 1,740 Ordinary A shares of £1 each, classified as equity. These shares carry voting rights.
The company has in issue 100 Ordinary B shares of £1 each, classified as equity. These shares carry voting rights.
23
Financial commitments, guarantees and contingent liabilities
In both the current and prior year, there is a contingent liability regarding an import guarantee for £171,000, provided on behalf of the company by Lloyds TSB in the event that the company cannot service its obligations to a named supplier, NSA (Ventures) Limited.
24
Controlling party
The controlling party and ultimate controlling party is Mr A W F Prebble.
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2017
- 25 -
25
Related party transactions
No guarantees have been given or received.
NSA (Ventures) Limited
- Mr A W F Prebble is a director
During the period purchases were made from the related party totalling £4,725,105 (2016: £4,608,543). At the period end the company owed the related party £8,146 (2016: £12,192
).
O. Stride & Sons Limited
- Mrs J Stride (Minority shareholder in Silverlake Garage (Motor Salvage) Limited) is a shareholder
During the period purchases were made from the related party totalling £258 (2016: £40). At the period end the company owed the related party £Nil (2016: £Nil).
Mr A W F Prebble
– Director and shareholder
During the period the related party made advances to the company totalling £532,064 (2016: £176,763). The company made repayments to the related party totalling £615,462 (2016: £91,376).
At the period end the company owed the related party £3,202 (2016: £86,600
).
The loan is repayable on demand, with no interest being payable by the company.
Dividends paid to the director in the year totalled £368,160 (2016: £174,754
).
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