Company registration number 00605978 (England and Wales)
KIRKBY (TYRES) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
KIRKBY (TYRES) LIMITED
COMPANY INFORMATION
Director
G A Rosenthal
Secretary
R Walls
Company number
00605978
Registered office
3rd Floor
5 Temple Square
Temple Street
Liverpool
Merseyside
L2 5RH
Auditor
Mitchell Charlesworth (Audit) Limited
3rd Floor
5 Temple Square
Temple Street
Liverpool
Merseyside
L2 5RH
KIRKBY (TYRES) LIMITED
CONTENTS
Page
Strategic report
1 - 2
Director's report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 24
KIRKBY (TYRES) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -

The director presents the strategic report and financial statements for the year ended 31 March 2023.

Fair review of the business

 

The director considers that the key performance indicators that are relevant to the company are units sold, turnover,  gross profit and net profit.

 

The director is extremely pleased with the growth in sales during the year, in a period of economic uncertainty to gain market share and achieve 12% growth in turnover underlines the company’s strength, the director feels performance has exceeded expectations.

 

Post year end has shown further sales growth. However, with a weakened Pound and a continuation of increases in interest rates, the company is focused in carefully managing its overhead.

 

Continued investment in stock holding, staff numbers and infrastructure of the business post year end puts the company in a strong position for further growth.

 

Risks and uncertainties

 

The company considers its key risk in business being fluctuations in foreign currency and trade debtor risk.

 

Foreign currency risk arises as the majority of stock purchases are paid in Euro or US Dollars. This risk is managed by forward buying for stock purchases and management of cashflow and foreign currency availability.

 

Trade debtor risk arises from the substantial and continually increasing customer base. This risk is managed by having a suitable credit insurance policy in place and by close monitoring of credit limits and debtors terms.

Policy on payment of creditors

 

Creditors are paid in accordance with terms of business agreed with individual suppliers. Given the varying terms of business agreed with suppliers, the director has not calculated an average creditor day figure as a whole on the basis that such a statement would not be beneficial.

KIRKBY (TYRES) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
Section 172 (1) of the Companies Act 2006

Promoting the success of the company

 

The director considers that he has acted in a way that is considered, in good faith, to be most likely to promote the success of the company for the benefit of its members as a whole.

 

Being a family owned business with director representation, the business has always been run with long term objectives for success being key. The decisions taken during the year continue to focus on the long term success of the business, recognising that all stakeholders including employees, customers, suppliers and the environment are key to achieving this goal.

 

In looking at the long term success of the company the director has made significant strategic investment decisions including a substantial expansion of the site and warehousing capacity. The director has also ensured that further technical infrastructure investment has been made to strengthen the company’s long term growth ambitions and secure continued partnerships with its suppliers, customers and employees. We regularly engage with our key stakeholders, ensuring that we are up to date with Company, Legal, Ethical and Health & Safety laws and regulations.

 

The large majority of suppliers have been in a long term partnership with the company, whilst forging new relationships is key to business, the director ensures that the suppliers, who have worked with the company for many years are always considered. Wherever possible we engage with local suppliers to ensure we are supporting our local community. We ensure we procure quality products whilst also maintaining a high level of ethical standards in our procurement process.

 

We are extremely proud of having long standing relationships with many of our customers, it is our aim to ensure we offer our customers with a wide range of products and a high level of service and support. We engage with our customers through rewards and loyalty programmes, social media engagement and maintaining an informative commercial website.

 

The majority of the employees come from the immediate Liverpool City region, highlighting our support of the community local to our head office. As a company we provide relevant training, reward performance and promote career development opportunities which all contribute to a high proportion of long standing employees. We ensure that our employees can work in a friendly, safe and rewarding environment. With Wellbeing and Health & Safety of team members being a key focus of the business, this has been expanded further this year with the introduction of an Employee Forum.

 

Our environmental policies and considerations are highlighted within our SECR reporting requirements which form part of the directors report in the consolidated group accounts, we have gained ISO 14001 Environmental Management Accreditation post year end, an area we will look to further improve on in the future.

 

As highlighted above we are keen to support our local community wherever we can, this is done partly by using local suppliers for goods and services, providing goods required to local customers and employing local people. The company also ensures support of local charities through financial donations, foodbank donations and offering support wherever we can.

 

We consider it fundamental to our company that we maintain an exemplary standard of business conduct with all our key stakeholders.

 

 

By order of the board

R Walls
Secretary
25 October 2023
KIRKBY (TYRES) LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -

The director presents his annual report and financial statements for the year ended 31 March 2023.

Principal activities

The principal activity of the company during the year was that of wholesale tyre distributors.

Results and dividends

The results for the year are set out on page 9.

No ordinary dividends were paid. The director does not recommend payment of a final dividend.

Director

The director who held office during the year and up to the date of signature of the financial statements was as follows:

D Dorrity
(Resigned 23 December 2022)
G A Rosenthal
Auditor

Having expressed a willingness to continue in office, Mitchell Charlesworth (Audit) Limited are deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of director's responsibilities

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:

 

 

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.

Strategic report

In accordance with section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 the company's strategic report information required by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 is noted in the strategic report on page 1 and 2.

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.

KIRKBY (TYRES) LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 4 -
By order of the board
R Walls
G A Rosenthal
Secretary
Director
25 October 2023
KIRKBY (TYRES) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF KIRKBY (TYRES) LIMITED
- 5 -
Opinion

We have audited the financial statements of Kirkby (Tyres) Limited (the 'company') for the year ended 31 March 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with 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

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. 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. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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:

KIRKBY (TYRES) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KIRKBY (TYRES) LIMITED
- 6 -
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 identified material misstatements in the strategic report or the director's report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of director

As explained more fully in the director's responsibilities statement, 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 director determines 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 has no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Extent to which the audit was considered capable of detecting irregularities, including fraud

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:

 

KIRKBY (TYRES) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KIRKBY (TYRES) LIMITED
- 7 -

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas:

 

(i) The presentation of the Statement of Comprehensive Income, (ii) the accounting policy for revenue recognition (iii) overstatement of stocks. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

 

We also obtained an understanding of the legal and regulatory framework that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act.

 

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty.

Audit response to risks identfied

Our procedures to respond to risks identified included the following:

 

 

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

KIRKBY (TYRES) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KIRKBY (TYRES) LIMITED
- 8 -

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Richard Johnson
Senior Statutory Auditor
For and on behalf of Mitchell Charlesworth (Audit) Limited
25 October 2023
Accountants
Statutory Auditor
3rd Floor
5 Temple Square
Temple Street
Liverpool
Merseyside
L2 5RH
KIRKBY (TYRES) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
67,616,183
60,355,983
Cost of sales
(52,124,980)
(45,365,646)
Gross profit
15,491,203
14,990,337
Distribution costs
(6,927,274)
(5,237,085)
Administrative expenses
(5,481,019)
(5,195,203)
Operating profit
4
3,082,910
4,558,049
Interest receivable and similar income
39,051
31,630
Interest payable and similar expenses
7
(453,942)
(116,040)
Profit before taxation
2,668,019
4,473,639
Taxation
8
(526,045)
(893,538)
Profit for the financial year
2,141,974
3,580,101
Other comprehensive income
-
-
Total comprehensive income for the year
2,141,974
3,580,101

This statement has been prepared on the basis that all operations are continuing.

KIRKBY (TYRES) LIMITED
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
10
259,785
244,677
Tangible assets
11
7,194,857
7,119,194
7,454,642
7,363,871
Current assets
Stocks
14
20,119,253
19,262,948
Debtors
15
15,585,862
16,466,556
Cash at bank and in hand
2,748,331
559,499
38,453,446
36,289,003
Creditors: amounts falling due within one year
16
(20,166,001)
(19,274,144)
Net current assets
18,287,445
17,014,859
Total assets less current liabilities
25,742,087
24,378,730
Creditors: amounts falling due after more than one year
17
-
0
(817,617)
Provisions for liabilities
Deferred tax liability
19
285,000
246,000
(285,000)
(246,000)
Net assets
25,457,087
23,315,113
Capital and reserves
Called up share capital
21
1,000
1,000
Profit and loss reserves
25,456,087
23,314,113
Total equity
25,457,087
23,315,113
The financial statements were approved by the board of directors and authorised for issue on 25 October 2023 and are signed on its behalf by:
G A Rosenthal
Director
Company Registration No. 00605978
KIRKBY (TYRES) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2021
1,000
19,791,128
19,792,128
Year ended 31 March 2022:
Profit and total comprehensive income for the year
-
3,580,101
3,580,101
Dividends
9
-
(57,116)
(57,116)
Balance at 31 March 2022
1,000
23,314,113
23,315,113
Year ended 31 March 2023:
Profit and total comprehensive income for the year
-
2,141,974
2,141,974
Balance at 31 March 2023
1,000
25,456,087
25,457,087
KIRKBY (TYRES) LIMITED
NOTES TO THE  FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 12 -
1
Accounting policies
Company information

Kirkby (Tyres) Limited is a company limited by shares incorporated in England and Wales. The registered office is 3rd Floor, 5 Temple Square, Temple Street, Liverpool, Merseyside, L2 5RH.

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 amounts 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.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of J Rose (Tyres) Limited. These consolidated financial statements are available from its registered office, 3rd Floor, 5 Temple Square, Temple Street, Liverpool, Merseyside, England, L2 5RH.

1.2
Going concern

At the time of approving the financial statements, the director hatrues a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The director has considered a period of twelve months from the date of the approval of these financial statements. Thus, the 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 goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

KIRKBY (TYRES) LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 13 -
1.4
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Amortisation 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:

Software
10-20% straight line
1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost.

Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life of that asset as follows.

Land and buildings
Not depreciated
Plant and machinery
10% - 33.33% straight line
Motor vehicles
33.33% straight line

The directors are maintaining the company's long leasehold property to a high standard, and its useful economic life and residual value based on current assessments is such that depreciation would not be material. Provision will be made in the Profit and Loss Account for any permanent diminution in value that arises.

 

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
Impairment of fixed assets

At each reporting 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.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.

KIRKBY (TYRES) LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 14 -

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) prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried in 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 sell.

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 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.

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.

KIRKBY (TYRES) LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
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, including creditors, bank loans and loans from fellow group undertakings, 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.

 

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. Amounts 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 subsequently 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.

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 transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

KIRKBY (TYRES) LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 16 -
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.

Deferred tax

Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the Balance Sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more tax.

 

Deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.

 

Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the Balance Sheet date.

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

The company operates a defined contribution pension scheme and the contributions are charged to the Profit and Loss Account in the year in which they are payable.

1.14
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss 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 leases asset are consumed.

1.15

Foreign currencies

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit and loss account.

KIRKBY (TYRES) LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 17 -
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.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Useful economic lives of properties, plant and equipment

The annual depreciation charge for land, buildings, plant and equipment is sensitive to changes in estimated useful economic lives of the assets. The useful lives of the assets are assessed on an annual basis based on experience and are amended when necessary to reflect current estimates.

Stock provisioning

Being a stockist and distributor of tyres it is necessary to consider the recoverability of the cost of the inventory and the associated provisioning required. Management consider the nature and condition of inventory as well as historic movements extracted from the inventory records when considering the level of provisioning.

3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2023
2022
£
£
Turnover
United kingdom
63,043,060
56,425,570
Overseas
4,573,123
3,930,413
67,616,183
60,355,983
Other significant revenue
Interest income
39,051
31,630
KIRKBY (TYRES) LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 18 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditors for the audit of the company's financial statements
9,700
9,350
Depreciation of owned tangible fixed assets
228,942
264,909
Amortisation of intangible assets
87,420
64,348
Operating lease charges
381,476
337,983
Remuneration paid to the company's auditor for services other than the statutory audit of the company are not analysed in these accounts, since the consolidated accounts of the ultimate parent undertaking, J. Rose (Tyres) Limited are required to disclose non-audit fees on a consolidated basis.
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Number of distribution staff
67
61
Number of administrative staff
23
24
Total
90
85

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
4,477,077
4,800,830
Social security costs
537,388
545,328
Pension costs
67,394
102,746
5,081,859
5,448,904
KIRKBY (TYRES) LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 19 -
6
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
576,215
969,783
Company pension contributions to defined contribution schemes
1,321
1,321
577,536
971,104

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).

Remuneration disclosed above include the following amounts paid to the highest paid director:
Remuneration for qualifying services
462,066
864,822
Company pension contributions to defined contribution schemes
1,321
1,321

 

7
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
453,942
116,040
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
486,741
844,000
Adjustments in respect of prior periods
304
(19,987)
Total current tax
487,045
824,013
Deferred tax
Origination and reversal of timing differences
39,000
69,525
Total tax charge
526,045
893,538
KIRKBY (TYRES) LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
8
Taxation
(Continued)
- 20 -

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:

2023
2022
£
£
Profit before taxation
2,668,019
4,473,639
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
506,924
849,991
Tax effect of expenses that are not deductible in determining taxable profit
12,099
5,306
Adjustments in respect of prior years
304
(19,987)
Effect of change in tax rate
9,834
58,228
Enhanced allowances
(3,116)
-
0
Taxation charge for the year
526,045
893,538
9
Dividends
2023
2022
£
£
Interim paid
-
0
57,116
10
Intangible fixed assets
Software
£
Cost
At 1 April 2022
421,105
Additions
102,528
At 31 March 2023
523,633
Amortisation and impairment
At 1 April 2022
176,428
Amortisation charged for the year
87,420
At 31 March 2023
263,848
Carrying amount
At 31 March 2023
259,785
At 31 March 2022
244,677
KIRKBY (TYRES) LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 21 -
11
Tangible fixed assets
Land and buildings
Plant and machinery
Motor vehicles
Total
£
£
£
£
Cost
At 1 April 2022
6,986,583
1,581,750
2,786
8,571,119
Additions
228,593
71,516
4,496
304,605
At 31 March 2023
7,215,176
1,653,266
7,282
8,875,724
Depreciation and impairment
At 1 April 2022
518,583
932,002
1,340
1,451,925
Depreciation charged in the year
-
0
228,014
928
228,942
At 31 March 2023
518,583
1,160,016
2,268
1,680,867
Carrying amount
At 31 March 2023
6,696,593
493,250
5,014
7,194,857
At 31 March 2022
6,468,000
649,748
1,446
7,119,194

Land and buildings include a cost of £1,860,408 in relation to long leasehold property held on a 999 year lease granted in 1937. The remaining long leasehold land and buildings represent an extension to the site upon which, additional warehousing has been constructed.

12
Investments

The company owns the entire issued share capital of Web Tyres Limited, a dormant company incorporated in England. The cost of investment has been written down to nil in previous years.

13
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
15,050,149
15,366,461
Carrying amount of financial liabilities
Measured at amortised cost
17,912,300
17,922,635
14
Stocks
2023
2022
£
£
Finished goods and goods for resale
20,119,253
19,262,948

Goods for resale includes £4,689,030 (2022: £3,322,860) of stock in transit at 31 March 2023.

 

KIRKBY (TYRES) LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 22 -
15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
11,886,241
12,706,034
Corporation tax recoverable
346,976
-
0
Amounts owed by group undertakings
2,097,489
2,407,088
Other debtors
1,066,419
253,339
Prepayments and accrued income
188,737
1,100,095
15,585,862
16,466,556
16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
18
8,745,709
10,914,085
Trade creditors
5,420,462
787,775
Amounts due to parent undertaking
2,276,340
2,201,051
Corporation tax
283,717
383,696
Other taxation and social security
1,969,984
1,785,430
Other creditors
14,458
19,191
Accruals and deferred income
1,455,331
3,182,916
20,166,001
19,274,144
17
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
18
-
0
817,617
18
Loans and overdrafts
2023
2022
£
£
Bank loans
818,870
982,931
Bank overdrafts
7,926,839
10,748,771
8,745,709
11,731,702
Payable within one year
8,745,709
10,914,085
Payable after one year
-
0
817,617
KIRKBY (TYRES) LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
18
Loans and overdrafts
(Continued)
- 23 -

The bank facilities are secured by cross guarantees between all companies in the J. Rose (Tyres) Limited group and by a legal charge and debenture over the assets of the company.

Included in bank overdrafts and advances is an amount of £5,440,202 (2022: £8,525,508) due to Royal Bank of Scotland Commercial Services plc which is secured by a charge on the trade debts of the company.

19
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
2023
2022
Balances:
£
£
Accelerated capital allowances
285,000
246,000
2023
Movements in the year:
£
Liability at 1 April 2022
246,000
Charge to profit or loss
39,000
Liability at 31 March 2023
285,000
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
67,394
102,746

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.

21
Share capital
2023
2022
£
£
Ordinary share capital
Authorised, issued and fully paid
1,000 Ordinary shares of £1 each
1,000
1,000
KIRKBY (TYRES) LIMITED
NOTES TO THE  FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 24 -
22
Financial commitments, guarantees and contingent liabilities

The company has in the normal course of trade given indemnities to third parties, entered into forward currency contracts and has outstanding letters of credit. No additional liabilities are expected to arise from these transactions other than amounts provided in the accounts.

23
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
217,400
171,746
Between two and five years
188,790
90,247
406,190
261,993
24
Related party transactions

During the year the company traded with Kirkby Tyres (Ireland) Limited, a fellow subsidiary undertaking, sales during the year amounted to £1,387,431 (2022: £1,183,411), and purchases amounted to £16,157 (2022: £94,726). At 31 March 2023 a balance was due from Kirkby Tyres (Ireland) Limited of £421,297 (2022: £885,003).

 

During the year the company transferred funds to Kirkby Tyres Property Limited, a fellow subsidiary undertaking, amounting to £102,867 (2022: £264,792). At 31 March 2023 there was a balance due from Kirkby Tyres Property Limited of £1,676,193 (2022: £1,522,085). Interest of £51,241 (2022: £31,630) was charged on this loan during the year.

 

During the year the company paid a management charge to J. Rose (Tyres) Limited, the ultimate parent undertaking, amounting to £10,000 (2022: £10,000). At 31 March 2023 there was a balance due to J. Rose (Tyres) Limited of £2,276,340 (2022: £2,201,051).

 

Included in other debtors is an amount of £1,028,077 (2022: £Nil) in respect of amounts advanced to the company director Mr G A Rosenthal. This was the maximum amount outstanding during the year.

25
Ultimate controlling party

The ultimate parent undertaking is J. Rose (Tyres) Limited, incorporated in England. J. Rose (Tyres) Limited is under the ultimate control of Mr G A Rosenthal, director and shareholder.

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