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Harratts M1 Limited |
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Financial Statements |
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for the Year Ended 31 December 2021 |
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REGISTERED NUMBER:
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Harratts M1 Limited |
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Financial Statements |
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for the Year Ended 31 December 2021 |
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Harratts M1 Limited (Registered number: 02820886) |
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Contents of the Financial Statements |
for the year ended 31 December 2021 |
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Company Information | 1 |
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Statement of Financial Position | 2 |
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Notes to the Financial Statements | 3 |
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Harratts M1 Limited |
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Company Information |
for the year ended 31 December 2021 |
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DIRECTORS: |
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SECRETARY: |
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REGISTERED OFFICE: |
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REGISTERED NUMBER: |
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AUDITORS: |
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Chartered Accountants & Statutory Auditor |
33 George Street |
Wakefield |
West Yorkshire |
WF1 1LX |
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BANKERS: |
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Market Place |
Dewsbury |
West Yorkshire |
WF13 1DH |
Harratts M1 Limited (Registered number: 02820886) |
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Statement of Financial Position |
31 December 2021 |
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2021 | 2020 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 4 |
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CURRENT ASSETS |
Stocks |
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Debtors | 5 |
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Cash in hand |
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CREDITORS |
Amounts falling due within one year | 6 |
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NET CURRENT LIABILITIES | ( |
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TOTAL ASSETS LESS CURRENT
LIABILITIES |
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CAPITAL AND RESERVES |
Called up share capital |
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Retained earnings | ( |
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SHAREHOLDERS' FUNDS | ( |
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In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered. |
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The financial statements were approved by the Board of Directors and authorised for issue on
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Harratts M1 Limited (Registered number: 02820886) |
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Notes to the Financial Statements |
for the year ended 31 December 2021 |
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1. | STATUTORY INFORMATION |
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Harratts M1 Limited is a
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The company's functional and presentation currency is the pound sterling £. All financial information presented has been rounded to the nearest £, unless otherwise stated. |
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2. | ACCOUNTING POLICIES |
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Basis of preparing the financial statements |
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Going concern |
The directors have continued to review the company's business activities, together with the factors likely to affect its future development and performance including; its cash flows, liquidity position and borrowing facilities. The Group's objectives, policies and process for managing its capital; its financial risk management objectives and its exposure to credit risk and liquidity risk are all applied to this company. |
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Given the inherent level of uncertainty and the impact of COVID-19 on the wider economy, the Directors have taken additional actions in response to more challenging trading conditions than had been assumed. In the second quarter of 2022, the Group recorded a cooling of customer demand and a shift towards lower value vehicles. This being due to the increase in the cost of living following rising inflation, higher interest rates, and larger energy costs. This uncertainty is particularly significant as it is likely that households' discretionary spending will be adversely impacted in the short to medium term. |
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As used car motor dealers, the Board was able take immediate action to the change in customer demands by decreasing the stand in values of used stocks as well as amending retail stock profiles. As the Group is no longer reliant on new cars, changes to stock profiles to match current fluctuations in market conditions can be carried out at any given time. In order to ensure that the Group is competitive in the market place nationally, the Group review used stock retail prices daily adjusting to current prices where necessary. Stock management is strictly controlled in order that overage stock does not pose a problem should demand decrease. If there was a sharp decline in sales volume and/or margins, the Board is in a position to take immediate action including but not limited to the reduction in overhead costs and the reduction in stock levels to meet demands. |
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When making their assessment of the Group's ability to continue as a going concern, the Directors acknowledge that specific uncertainties exist over profitability and availability of funds. Within their Group financial plans and forecasts for the next 12 months, the Directors have taken account of the likelihood of the constriction of household disposable income and the appetite for consumer spending on high value items. |
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Operationally, the Group meets its day to day working capital requirements through a Group Bank overdraft facility as well as manufacturer and other third party linked funding lines. The Group's forecasts and projections, taking account of the factors outlined above, show that the Group should be able to operate within the level of its current facilities. The Group has the support of the Bank and the current overdraft facility with the Bank is in place until July 2023. The Group also has a very supportive shareholder base who are committed to the Group's long term success. This is demonstrated by the enduring commitment to retain a significant proportion of the Director's Loan credit balance as a long term liability, reviewed annually by the Board of Directors and ratified most recently on the 25th August 2022. |
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The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements. |
Harratts M1 Limited (Registered number: 02820886) |
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Notes to the Financial Statements - continued |
for the year ended 31 December 2021 |
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2. | ACCOUNTING POLICIES - continued |
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Turnover |
Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services. |
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The company recognises turnover when (a) the significant risks and rewards of ownership have been transferred to the buyer; (b) the company retains no continuing involvement or control over the goods; (c) the amount of revenue can be measured reliably and (d) it is probable that future economic benefits will flow to the entity. |
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Tangible fixed assets |
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Plant and equipment | - |
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Fixtures and fittings | - |
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Computer equipment | - |
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All fixed assets are initially recorded at cost. |
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Stocks |
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
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Cost incurred in bringing each product to its present location and condition is based on purchase price less trade discounts. |
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Financial assets and liabilities |
The company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments. |
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All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. |
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Financial assets and liabilities are only offset in the balance sheet when and only when there exists a legally enforceable right to set off the recognised amounts and the company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. |
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Financial assets are derecognised when and only when; a) the contractual rights to the cash flows from the financial asset expire or are settled, b) the company transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or, c) the company, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party. |
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Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires. |
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Harratts M1 Limited (Registered number: 02820886) |
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Notes to the Financial Statements - continued |
for the year ended 31 December 2021 |
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2. | ACCOUNTING POLICIES - continued |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
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Current or deferred taxation assets and liabilities are not discounted. |
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Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date. |
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Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date. |
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Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
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Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
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Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
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Operating lease agreements |
Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits on a straight line basis over the period of the lease. |
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Provisions for liabilities and charges |
Provisions for the expected costs of maintenance under guarantees are charged against profits when products have been invoiced. The effect of the time value of money is not material and therefore the provisions are not discounted. |
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3. | EMPLOYEES AND DIRECTORS |
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The average number of employees during the year was
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Harratts M1 Limited (Registered number: 02820886) |
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Notes to the Financial Statements - continued |
for the year ended 31 December 2021 |
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4. | TANGIBLE FIXED ASSETS |
Fixtures |
Plant and | and | Computer |
equipment | fittings | equipment | Totals |
£ | £ | £ | £ |
COST |
At 1 January 2021 |
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Additions |
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Disposals | ( |
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At 31 December 2021 |
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DEPRECIATION |
At 1 January 2021 |
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Charge for year |
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Eliminated on disposal | ( |
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At 31 December 2021 |
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NET BOOK VALUE |
At 31 December 2021 |
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At 31 December 2020 |
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5. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2021 | 2020 |
£ | £ |
Trade debtors |
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Other debtors |
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Prepayments and accrued income |
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6. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2021 | 2020 |
£ | £ |
Bank loans and overdrafts |
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Vehicle stocking loans |
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Trade creditors |
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Amounts owed to group undertakings |
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PAYE and NIC |
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VAT | 24,070 | 40,551 |
Other creditors |
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Accruals and deferred income |
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Harratts M1 Limited (Registered number: 02820886) |
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Notes to the Financial Statements - continued |
for the year ended 31 December 2021 |
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7. | LEASING AGREEMENTS |
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Minimum lease payments under non-cancellable operating leases fall due as follows: |
2021 | 2020 |
£ | £ |
Within one year |
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Between one and five years |
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In more than five years |
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8. | SECURED DEBTS |
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The following secured debts are included within creditors: |
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2021 | 2020 |
£ | £ |
Bank overdrafts |
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Vehicle stocking loans |
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The bank overdraft is secured by a fixed charge over the book debts and a floating charge over all other assets. |
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Third party vehicle stocking loans are at variable commercial rates of interest and are secured at any time by charges on stocks of used vehicles. |
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9. | DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006 |
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The Report of the Auditors was unqualified. |
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for and on behalf of
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Material uncertainty related to going concern |
In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosures made in note 2 to the financial statements concerning the company's ability to continue as a going concern. The company incurred a net loss of £325,148 during the year ended 31 December 2021 and, at that date the company's current liabilities exceeded its total assets by £2,157,699 and it had net current liabilities of £2,242,521. These conditions, along with the other matters explained in note 2 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 were unable to continue as a going concern. |
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In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Harratts M1 Limited (Registered number: 02820886) |
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Notes to the Financial Statements - continued |
for the year ended 31 December 2021 |
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10. | CONTINGENT LIABILITIES |
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An unlimited cross guarantee was given on 11th July 1994 to HSBC Bank plc by The Harratts Group Limited to secure the assets and liabilities of Harratts M1 Limited. |
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In addition, a Deed of Corporate Guarantee and Indemnity was given to RCI Financial Services Limited on 17 March 2015 by The Harratts Group Limited, to guarantee the vehicle financing facility obligations of Harratts M1 Limited. |
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11. | RELATED PARTY DISCLOSURES |
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The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
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The company is a wholly owned subsidiary of The Harratts Group Limited. The largest group in which the results of the company are consolidated is that headed by The Harratts Group Limited, whose registered office is: |
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Group Head Office |
339 Denby Dale Road |
Wakefield |
West Yorkshire |
WF4 3BB |
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During the year the company paid rent of £94,785 (2020: £94,785) in respect of business premises owned by The Harratts Group Pension Scheme, a scheme in which the directors Mrs S M Harratt and Mr S T Harratt are trustees. |