KERR AND SMITH (GLASGOW) LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2017
Company Registration No. SC182559 (Scotland)
PAGES FOR FILING WITH REGISTRAR
KERR AND SMITH (GLASGOW) LIMITED
COMPANY INFORMATION
Directors
Mr James Smith
Mrs Donna McClure
Company number
SC182559
Registered office
Riverside Garage
Ayr Road
Cumnock
Ayrshire
KA18 1BJ
Auditor
William Duncan + Co
30 Miller Road
Ayr
Ayrshire
KA7 2AY
Business address
10 Springhill Parkway
Glasgow Business Park
Glasgow
G69 6GA
Bankers
Royal Bank of Scotland
Ayr Chief Office
30 Sandgate
Ayr
Ayrshire
KA7 1BY
Solicitors
Mackintosh & Wylie
Solicitors & Notaries
23 The Foregate
Kilmarnock
Ayrshire
KA1 1LE
KERR AND SMITH (GLASGOW) LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 7
KERR AND SMITH (GLASGOW) LIMITED
BALANCE SHEET
AS AT
31 JULY 2017
31 July 2017
- 1 -
2017
2016
Notes
£
£
£
£
Fixed assets
Tangible assets
3
860,212
889,129
Current assets
Stocks
4
2,308,338
2,651,267
Debtors
5
1,639,448
987,649
Cash at bank and in hand
50,674
660,541
3,998,460
4,299,457
Creditors: amounts falling due within one year
6
(3,433,424)
(3,914,249)
Net current assets
565,036
385,208
Total assets less current liabilities
1,425,248
1,274,337
Provisions for liabilities
(18,190)
(21,718)
Net assets
1,407,058
1,252,619
Capital and reserves
Called up share capital
7
135,000
135,000
Capital redemption reserve
150,000
150,000
Profit and loss reserves
1,122,058
967,619
Total equity
1,407,058
1,252,619
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.
true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies' regime.
The financial statements were approved by the board of directors and authorised for issue on 22 March 2018 and are signed on its behalf by:
Mr James Smith
Director
Company Registration No. SC182559
KERR AND SMITH (GLASGOW) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2017
- 2 -
1
Accounting policies
Company information
Kerr and Smith (Glasgow) Limited is a
private
company
limited by shares
incorporated in Scotland.
The registered office is
Riverside Garage, Ayr Road, Cumnock, Ayrshire, KA18 1BJ.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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 under the historical cost convention. The principal accounting policies adopted are set out below.
The company has taken advantage of the exemption available whereby it has not disclosed transactions with the ultimate parent company of the group.
1.2
Turnover
Turnover represents amounts receivable for the sale of commercial vehicles and aftersales servicing of light and heavy commercial vehicles net of VAT and trade discounts.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty.
Sales of goods are recognised when the goods are delivered, sales of services are recognised when the service has been provided and finance commissions are recognised on delivery of the related vehicles.
1.3
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.
Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset on a straight-line basis over its expected useful life, as follows:
Land and buildings Freehold
Over 25 to 40 years
Plant and machinery
Over 2 - 5 years
Fixtures, fittings & equipment
Over 2 - 5 years
Computer equipment
Over 2 - 5 years
Motor vehicles
Over 4 - 5 years
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
.
KERR AND SMITH (GLASGOW) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2017
1
Accounting policies
(Continued)
- 3 -
1.4
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
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.
1.5
Stocks
Stocks
are stated at the lower of cost and
estimated selling price less costs to complete and sell.
Parts stock is arrived at principally on a weighted average or a 'first-in, first-out' basis.
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.
1.6
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.
1.7
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.
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.
Financial liabilities classified as payable within one year are not amortised.
KERR AND SMITH (GLASGOW) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2017
1
Accounting policies
(Continued)
- 4 -
1.8
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.
1.9
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.
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.
1.10
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.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
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.
KERR AND SMITH (GLASGOW) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2017
1
Accounting policies
(Continued)
- 5 -
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.
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was 48 (2016 - 51).
3
Tangible fixed assets
Land and buildings
Plant and machinery etc
Total
£
£
£
Cost
At 1 August 2016
1,510,025
630,116
2,140,141
Additions
-
29,324
29,324
Disposals
-
(8,000)
(8,000)
At 31 July 2017
1,510,025
651,440
2,161,465
Depreciation and impairment
At 1 August 2016
780,000
471,012
1,251,012
Depreciation charged in the year
-
58,241
58,241
Eliminated in respect of disposals
-
(8,000)
(8,000)
At 31 July 2017
780,000
521,253
1,301,253
Carrying amount
At 31 July 2017
730,025
130,187
860,212
At 31 July 2016
730,025
159,104
889,129
4
Stocks
2017
2016
£
£
Used vehicle and parts stock
804,697
898,747
Consignment stock
1,503,641
1,752,520
2,308,338
2,651,267
KERR AND SMITH (GLASGOW) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2017
- 6 -
5
Debtors
2017
2016
Amounts falling due within one year:
£
£
Trade debtors
1,456,094
819,850
Other debtors
183,354
167,799
1,639,448
987,649
6
Creditors: amounts falling due within one year
2017
2016
£
£
Bank loans and overdrafts
367,866
304,971
Trade creditors
2,535,134
2,192,365
Amounts due to group undertakings
-
800,000
Other taxation and social security
219,619
164,797
Other creditors
310,805
452,116
3,433,424
3,914,249
Secured creditors amount to £2,435,624 (2016 - £2,312,285).
Bank loans and overdrafts are secured by a bond and floating charge over all assets of the company together with a fixed charge over book debts.
The consignment creditor included within trade creditors is secured upon the assets to which the funding relates.
7
Called up share capital
2017
2016
£
£
Ordinary share capital
Issued and fully paid
135,000 Ordinary Shares of £1 each
135,000
135,000
135,000
135,000
8
Audit report information
As the income statement has been omitted from the filing copy of the financial statements the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006
:
The auditor's report was unqualified.
The senior statutory auditor was Hazel Murphy ACA.
The auditor was William Duncan + Co.
KERR AND SMITH (GLASGOW) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2017
- 7 -
9
Financial commitments, guarantees and contingent liabilities
The company's bankers hold an inter company guarantee in respect of group borrowings. At 31 July 2017 the total bank borrowings of the group amounted to £488,542 (2016 - £1,658,604).
10
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2017
2016
£
£
-
60,000
11
Parent company
The ultimate parent company is Kerr and Smith (Cumnock) Limited, a company incorporated in Scotland.