Company Registration No. 00624778 (England and Wales)
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
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
England
SO32 2HL
Auditor
HJS Accountants Limited
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 - 9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 27
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2018
- 1 -
The director presents the strategic report for the year ended 31 March 2018.
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 23.28%.
- The gross profit percentage has increased from 42.72% in 2017 to 43.85% this year.
- The gross profit has increased by 26.52%.
- The profit before tax has increased by 29.85% and the profit after tax has increased by 72.63%.
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 2018. The benefits of this should continue to bolster turnover throughout 2018 and into 2019.
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
18 December 2018
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 MARCH 2018
- 2 -
The director presents his annual report and financial statements for the year ended 31 March 2018.
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 £1,250,000. 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
18 December 2018
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2018
- 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;
-
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 -
Opinion
We have audited the financial statements of Silverlake Garage (Motor Salvage) Limited (the 'company') for the year ended 31 March 2018 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and 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 FRS 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 31 March 2018 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.
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 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
We have nothing to report in respect of the following matters in relation to which the 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
.
The director is responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report 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 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the director's r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
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
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the director's
r
eport
.
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 director's remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's
r
esponsibilities
s
tatement, 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 the directors 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 the director either intends to liquidate the company or to cease operations, or have 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 the 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 located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor’s 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.
Angela Trainor (Senior Statutory Auditor)
for and on behalf of HJS Accountants Limited
21 December 2018
Chartered Accountants and Statutory Auditor
12 -14 Carlton Place
Southampton
Hampshire
England
SO15 2EA
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2018
- 6 -
2018
2017
as restated
Notes
£
£
Turnover
3
18,730,775
15,193,688
Cost of sales
(10,517,909)
(8,702,460)
Gross profit
8,212,866
6,491,228
Administrative expenses
(5,934,134)
(4,662,346)
Other operating income
91,814
81,169
Operating profit
4
2,370,546
1,910,051
Interest receivable and similar income
7
290
422
Interest payable and similar expenses
8
(47,277)
(48,991)
Fair value gains and losses on investment properties
12
(15,869)
(84,309)
Profit before taxation
2,307,690
1,777,173
Tax on profit
9
(337,065)
(635,633)
Profit for the financial year
1,970,625
1,141,540
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 2018
- 7 -
2018
2017
£
£
Profit for the year
1,970,625
1,141,540
Other comprehensive income
-
-
Total comprehensive income for the year
1,970,625
1,141,540
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
BALANCE SHEET
AS AT
31 MARCH 2018
31 March 2018
- 8 -
2018
2017
as restated
Notes
£
£
£
£
Fixed assets
Tangible assets
11
5,295,277
4,830,886
Investment properties
12
1,679,199
1,695,067
6,974,476
6,525,953
Current assets
Stocks
14
938,089
729,378
Debtors
15
716,975
706,584
Cash at bank and in hand
795,761
738,181
2,450,825
2,174,143
Creditors: amounts falling due within one year
16
(2,280,208)
(1,966,155)
Net current assets
170,617
207,988
Total assets less current liabilities
7,145,093
6,733,941
Creditors: amounts falling due after more than one year
17
(702,267)
(912,677)
Provisions for liabilities
20
(394,889)
(493,952)
Net assets
6,047,937
5,327,312
Capital and reserves
Called up share capital
23
2,000
2,000
Other reserves
1,336,880
1,336,880
Profit and loss reserves
4,709,057
3,988,432
Total equity
6,047,937
5,327,312
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
BALANCE SHEET (CONTINUED)
AS AT
31 MARCH 2018
31 March 2018
- 9 -
The financial statements were approved and signed by the director and authorised for issue on 18 December 2018
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 2018
- 10 -
Share capital
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
As restated for the period ended 31 March 2017:
Balance at 1 April 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
-
-
1,141,540
1,141,540
Dividends
10
-
-
(498,674)
(498,674)
Balance at 31 March 2017
2,000
1,336,880
3,988,432
5,327,312
Year ended 31 March 2018:
Profit and total comprehensive income for the year
-
-
1,970,625
1,970,625
Dividends
10
-
-
(1,250,000)
(1,250,000)
Balance at 31 March 2018
2,000
1,336,880
4,709,057
6,047,937
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2018
- 11 -
2018
2017
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
2,873,012
2,089,630
Interest paid
(47,277)
(48,991)
Income taxes (paid)/refunded
(279,600)
43,871
Net cash inflow from operating activities
2,546,135
2,084,510
Investing activities
Purchase of tangible fixed assets
(1,078,867)
(1,215,661)
Proceeds on disposal of tangible fixed assets
22,623
57,000
Interest received
290
422
Net cash used in investing activities
(1,055,954)
(1,158,239)
Financing activities
Repayment of bank loans
(175,644)
(170,982)
Payment of finance leases obligations
(6,957)
91,397
Dividends paid
(1,250,000)
(498,674)
Net cash used in financing activities
(1,432,601)
(578,259)
Net increase in cash and cash equivalents
57,580
348,012
Cash and cash equivalents at beginning of year
738,181
390,169
Cash and cash equivalents at end of year
795,761
738,181
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2018
- 12 -
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, England, SO32 2HL.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
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
Prior period error
A fair value gain on investment property in the prior year financial statements was accounted for incorrectly. The gain of £165,691 is now reflected in the statement of profit and loss instead of other reserves in the balance sheet.
The most recent set of financial statements included investment properties which were valued in line with the valuation guide provided by Zoopla. Following the submission, it was noted that this estimation on Zoopla had dropped significantly without reason and it was resolved that the property values in the financial statements were overstated by £250,000.
1.3
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.
1.4
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 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.
1.5
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
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2018
1
Accounting policies
(Continued)
- 13 -
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
.
1.6
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 profit or loss.
Where fair value cannot be achieved without undue cost or effort, investment property is accounted for as tangible fixed assets.
1.7
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets.
A provision is made for any impairment loss and taken to the profit and loss account.
1.8
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.
1.9
Cash at bank and in hand
Cash at bank and in hand
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.
1.10
Financial instruments
The company
only enters into Basic financial instrument transactions
.
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.
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2018
1
Accounting policies
(Continued)
- 14 -
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.
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
paymen
ts discounted at a market rate of interest.
Other financial liabilities
Financial assets and liabilities classified as receivable or payable within one year are not amortised.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.11
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2018
1
Accounting policies
(Continued)
- 15 -
1.12
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
1.13
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period.
Deferred tax
Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in the tax assessments.
Unrelieved tax losses and other 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.
The company's liability for current and deferred tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
1.14
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.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
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.
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 2018
1
Accounting policies
(Continued)
- 16 -
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.
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:
2018
2017
£
£
Turnover analysed by class of business
Used salvage
8,777,085
7,489,451
Parts
8,142,255
5,790,894
Auction
860,976
888,296
Other
170,494
160,381
Storage and recovery
779,965
864,666
18,730,775
15,193,688
2018
2017
£
£
Other significant revenue
Interest income
290
422
2018
2017
£
£
Turnover analysed by geographical market
United Kingdom
17,651,328
14,645,948
EC
1,079,447
547,740
18,730,775
15,193,688
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2018
- 17 -
4
Operating profit
2018
2017
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
6,500
6,250
Depreciation of owned tangible fixed assets
385,222
238,979
Depreciation of tangible fixed assets held under finance leases
226,028
207,735
Profit on disposal of tangible fixed assets
(19,397)
(54,401)
Cost of stocks recognised as an expense
10,038,075
8,402,887
Operating lease charges
41,112
40,687
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2018
2017
Number
Number
Administration
5
7
Parts
43
37
Salvage
11
9
Yard
2
3
Depollution
14
13
Transport
20
19
Outside
2
2
Export
4
3
101
93
Their aggregate remuneration comprised:
2018
2017
£
£
Wages and salaries
2,480,766
2,099,110
Social security costs
226,005
189,958
Pension costs
15,162
13,396
2,721,933
2,302,464
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2018
- 18 -
6
Director's remuneration
2018
2017
£
£
Remuneration for qualifying services
52,000
52,000
Company pension contributions to defined contribution schemes
391
352
52,391
52,352
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2017 - 1).
7
Interest receivable and similar income
2018
2017
£
£
Interest income
Interest on bank deposits
290
422
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
290
422
8
Interest payable and similar expenses
2018
2017
£
£
Interest on financial liabilities measured at amortised cost:
Interest on finance leases and hire purchase contracts
26,638
25,249
Other interest on financial liabilities
20,639
23,357
47,277
48,606
Other finance costs:
Other interest
-
385
47,277
48,991
9
Taxation
2018
2017
£
£
Current tax
UK corporation tax on profits for the current period
427,030
279,599
Adjustments in respect of prior periods
9,098
-
Total current tax
436,128
279,599
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2018
(Continued)
- 19 -
Deferred tax
Origination and reversal of timing differences
(52,605)
304,319
Changes in tax rates
(46,458)
9,414
Tax losses carried forward
-
42,301
Total deferred tax
(99,063)
356,034
Total tax charge
337,065
635,633
The actual charge 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:
2018
2017
£
£
Profit before taxation
2,307,690
1,777,173
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2017: 20.00%)
438,461
355,435
Tax effect of expenses that are not deductible in determining taxable profit
11,496
15,807
Tax effect of utilisation of tax losses not previously recognised
(52,605)
42,301
Adjustments in respect of prior years
-
50,000
Effect of change in corporation tax rate
(46,458)
9,414
Permanent capital allowances in excess of depreciation
-
229,615
Depreciation on assets not qualifying for tax allowances
15,148
-
Research and development tax credit
(34,390)
(33,800)
Under/(over) provided in prior years
9,098
-
Profit on sale of tangible assets
(3,685)
-
Transition adjustments
-
(33,139)
Taxation charge for the year
337,065
635,633
10
Dividends
2018
2017
£
£
Interim paid
1,250,000
498,674
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2018
- 20 -
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 2017
3,492,678
17,988
3,216,353
69,820
1,326,897
8,123,736
Additions
272,907
-
199,671
637
605,652
1,078,867
Disposals
-
-
(22,415)
-
(17,915)
(40,330)
At 31 March 2018
3,765,585
17,988
3,393,609
70,457
1,914,634
9,162,273
Depreciation and impairment
At 1 April 2017
565,261
17,988
1,898,818
43,600
767,183
3,292,850
Depreciation charged in the year
70,637
-
345,644
3,989
190,980
611,250
Eliminated in respect of disposals
-
-
(20,908)
-
(16,196)
(37,104)
At 31 March 2018
635,898
17,988
2,223,554
47,589
941,967
3,866,996
Carrying amount
At 31 March 2018
3,129,687
-
1,170,055
22,868
972,667
5,295,277
At 31 March 2017
2,927,417
-
1,317,215
26,220
560,034
4,830,886
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2018
11
Tangible fixed assets
(Continued)
- 21 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2018
2017
£
£
Plant and machinery
202,032
316,842
Motor vehicles
629,560
514,896
831,592
831,738
Depreciation charge for the year in respect of leased assets
226,028
207,735
12
Investment property
2018
£
Fair value
At 1 April 2017
1,695,067
Net gains or losses through fair value adjustments
(15,868)
At 31 March 2018
1,679,199
Investment property is comprised of two cottages, two bungalows, a field and woodland.
The fair value of the field and woodland has been arrived at by obtaining the market value per acre on Google. The values have been adjusted using the House Price Retail Index to arrive at the value at end of the period.
13
Financial instruments
2018
2017
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
540,948
490,575
Carrying amount of financial liabilities
Measured at amortised cost
2,285,053
2,310,157
14
Stocks
2018
2017
£
£
Raw materials and consumables
938,089
729,378
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2018
- 22 -
15
Debtors
2018
2017
Amounts falling due within one year:
£
£
Trade debtors
450,938
439,052
Other debtors
90,010
51,523
Prepayments and accrued income
176,027
216,009
716,975
706,584
16
Creditors: amounts falling due within one year
2018
2017
Notes
£
£
Bank loans and overdrafts
18
189,034
179,141
Obligations under finance leases
19
298,102
280,186
Trade creditors
606,017
517,154
Corporation tax
427,030
270,502
Other taxation and social security
270,392
298,173
Other creditors
114,612
47,731
Accruals and deferred income
375,021
373,268
2,280,208
1,966,155
17
Creditors: amounts falling due after more than one year
2018
2017
Notes
£
£
Bank loans and overdrafts
18
228,782
414,319
Obligations under finance leases
19
473,485
498,358
702,267
912,677
18
Loans and overdrafts
2018
2017
£
£
Bank loans
417,816
593,460
Payable within one year
189,034
179,141
Payable after one year
228,782
414,319
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.
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2018
18
Loans and overdrafts
(Continued)
- 23 -
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%.
19
Finance lease obligations
2018
2017
Future minimum lease payments due under finance leases:
£
£
Within one year
298,102
280,186
In two to five years
473,485
498,358
771,587
778,544
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.
20
Provisions for liabilities
2018
2017
Notes
£
£
Deferred tax liabilities
21
394,889
493,952
21
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
2018
2017
Balances:
£
£
Accelerated capital allowances
394,889
493,952
2018
Movements in the year:
£
Liability at 1 April 2017
493,952
Credit to profit or loss
(99,063)
Liability at 31 March 2018
394,889
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2018
21
Deferred taxation
(Continued)
- 24 -
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.
22
Retirement benefit schemes
2018
2017
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
15,162
13,396
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.
23
Share capital
2018
2017
£
£
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. The share classes are Ordinary, Ordinary A and Ordinary B.
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.
24
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.
25
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 2018
- 25 -
26
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2018
2017
£
£
Aggregate compensation
52,391
52,352
NSA (Ventures) Limited
- Mr A W F Prebble is a director
During the period purchases were made from the related party totalling £5,543,772 (2017: £4,725,105). At the period end the company owed the related party £26,601 (2017: £8,146
).
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 £1,815 (2017: £258). At the period end the company owed the related party £Nil (2017: £Nil).
Mr A W F Prebble
– Director and shareholder
During the period the related party made advances to the company totalling £1,118,451 (2017: £532,064). The company made repayments to the related party totalling £1,090,186 (2017: £615,462). At the period end the company owed the related party £31,467 (2017: £3,202
).
The loan is repayable on demand, with no interest being payable by the company.
Dividends paid to the director in the year totalled £1,009,240 (2017: £368,160).
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2018
- 26 -
27
Cash generated from operations
2018
2017
£
£
Profit for the year after tax
1,970,624
1,141,539
Adjustments for:
Taxation charged
337,065
635,633
Finance costs
47,277
48,991
Investment income
(290)
(422)
Gain on disposal of tangible fixed assets
(19,397)
(54,401)
Fair value gains and losses on foreign exchange contracts and investment properties
15,869
84,309
Depreciation and impairment of tangible fixed assets
611,250
446,714
Movements in working capital:
(Increase) in stocks
(208,711)
(100,219)
(Increase) in debtors
(10,391)
(256,654)
Increase in creditors
129,716
144,140
Cash generated from operations
2,873,012
2,089,630
28
Prior period adjustment
Reconciliation of changes in equity
1 April
31 March
2016
2017
Notes
£
£
Equity as previously reported
4,684,446
5,577,312
Adjustments to prior year
Revaluation on investment property
A
-
(250,000)
Equity as adjusted
4,684,446
5,327,312
Reconciliation of changes in profit for the previous financial period
2017
Notes
£
Profit as previously reported
1,225,849
Adjustments to prior year
Revaluation on investment property
A
(84,309)
Profit as adjusted
1,141,540
SILVERLAKE GARAGE (MOTOR SALVAGE) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2018
28
Prior period adjustment
(Continued)
- 27 -
Notes to reconciliation
A
A fair value gain on investment property in the prior year financial statements was accounted for incorrectly. The gain of £165,691 is now reflected in the statement of profit and loss instead of other reserves in the balance sheet. The charge to the profit and loss has subsequently been reduced by a correction of the property valuations;
The most recent set of financial statements included investment properties which were valued in line with the valuation guide provided by Zoopla. Following the submission, it was noted that this estimation on Zoopla had dropped significantly without reason and it was resolved that the property values in the financial statements were overstated by £250,000.
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