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COMPANY REGISTRATION NUMBER: SC324402
Dalkeith Retail Centre Limited
Financial Statements
31 December 2022
Dalkeith Retail Centre Limited
Financial Statements
Year ended 31 December 2022
Contents
Page
Officers and professional advisers
1
Strategic report
2
Directors' report
3
Independent auditor's report to the members
6
Statement of comprehensive income
10
Statement of financial position
11
Statement of changes in equity
13
Statement of cash flows
14
Notes to the financial statements
15
Dalkeith Retail Centre Limited
Officers and Professional Advisers
The board of directors
W J Short
Mrs J M Short
M Short
I Short
D Short
D Thomson
G Salmond
B Short
Company secretary
Mrs J M Short
Registered office
39 - 41 Bonnyrigg Road
Dalkeith
Midlothian
EH22 3HF
Auditor
Charles Burrows & Co
Chartered accountants & Statutory Auditor
7 Palmerston Place
Edinburgh
EH12 5AH
Dalkeith Retail Centre Limited
Strategic Report
Year ended 31 December 2022
Fair Review of the Business The company's turnover and profitability improved in the year, all branches perfomed well including the branch at Kirkcaldy where a full years trading occurred, the company commenced trading at this branch in February 2021. Turnover increased to over £81 million, from £62.7 million (up 22.6% year on year) and profit increased from £1,760,000 to £1,984,000, the directors note that the company recorded strong sales in all areas Gross margin was in line with previous periods. Liabilities are being met and the company has no issues with day to day funding of its operations. Increased profitability is allowing the directors to invest in the business, ensuring that it continues to compete in a competitive market. The directors would like to thank its loyal customer base, who continue to buy vehicles and use our approved service departments and new customers who have discovered our dealerships during this year. The directors are aware that in today's market customer loyality cannot be taken for granted. Principal Risks and Uncertainties The directors are aware that Dalkeith Retail Centre Limited are in a very competitive market and we will continue to ensure that the customer experience is a good one, investing in both our dealerships and our people. The director's note there will be inevitable pressures on our margins due to rising inflation and are taking all steps to ensure we remain competitive whilst delivering the service our customers expect. Future Developments The directors are exploring options to expand the business and strengthen our partnership with the Ford Motor Company in our existing sites and at new sites in Scotland.
This report was approved by the board of directors on 31 October 2023 and signed on behalf of the board by:
D Short
Director
Registered office:
39 - 41 Bonnyrigg Road
Dalkeith
Midlothian
EH22 3HF
Dalkeith Retail Centre Limited
Directors' Report
Year ended 31 December 2022
The directors present their report and the financial statements of the company for the year ended 31 December 2022 .
Principal activities
The principal activity of the company during the year was the retailing and after sales service of motor vehicles.
Directors
The directors who served the company during the year were as follows:
W J Short
Mrs J M Short
M Short
I Short
D Short
D Thomson
G Salmond
G Close
(Died 1 February 2022)
The directors report the sad death of Gordon Close on 1 February 2022, and would like to acknowledge his contribution to the development of the business.
Dividends
Particulars of dividends are detailed in note 13 of the financial statements.
Disclosure of information in the strategic report
The directors have chosen to disclose information regarding future developments in the strategic report.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have 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 directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgments and accounting estimates that are reasonable and prudent; - state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are 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. They are 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.
Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This report was approved by the board of directors on 31 October 2023 and signed on behalf of the board by:
D Short
Director
Registered office:
39 - 41 Bonnyrigg Road
Dalkeith
Midlothian
EH22 3HF
Dalkeith Retail Centre Limited
Independent Auditor's Report to the Members of Dalkeith Retail Centre Limited
Year ended 31 December 2022
Opinion
We have audited the financial statements of Dalkeith Retail Centre Limited (the 'company') for the year ended 31 December 2022 which comprise the statement of comprehensive income, statement of financial position, statement of changes in equity, statement of cash flows and the related notes, 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 December 2022 and of its profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.
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 directors' 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 directors 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 directors are responsible for the other information. 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 the audit:
- the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
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 directors' 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: - adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or - the financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are 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 directors are 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 directors either intend 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. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: At the planning stage, we gained an understanding of the legal and regulatory framework applicable to the company and considered the risks of acts by the company which were contrary to the applicable laws and regulations; We discussed amongst the engagement team the identified laws and regulations and remained alert to any indications of non-compliance. During the audit, we focuses on areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements through discussions with directors and review of minutes of meetings in the year. We also considered those other laws and regulations that have a direct impact on the preparation of financial statements We inquired of the directors whether they have knowledge of any actual, suspected or alleged fraud We discussed amongst the engagement team the risk of fraud such as opportunities for fraudulent manipulation of financial statements. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatements in the financial statements or non-compliance with regulation. The risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation (i.e. gives a true and fair view). We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 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.
William A S Gunn
(Senior Statutory Auditor)
For and on behalf of
Charles Burrows & Co
Chartered accountants & Statutory Auditor
7 Palmerston Place
Edinburgh
EH12 5AH
31 October 2023
Dalkeith Retail Centre Limited
Statement of Comprehensive Income
Year ended 31 December 2022
2022
2021
Note
£
£
Turnover
4
81,096,213
62,789,452
Cost of sales
72,854,398
56,650,293
---------------
---------------
Gross profit
8,241,815
6,139,159
Administrative expenses
6,229,317
4,389,585
Other operating income
5
2,659
39,500
-------------
-------------
Operating profit
6
2,015,157
1,789,074
Other interest receivable and similar income
10
38
Interest payable and similar expenses
11
43,344
28,120
-------------
-------------
Profit before taxation
1,971,851
1,760,954
Tax on profit
12
371,362
327,710
-------------
-------------
Profit for the financial year and total comprehensive income
1,600,489
1,433,244
-------------
-------------
All the activities of the company are from continuing operations.
Dalkeith Retail Centre Limited
Statement of Financial Position
31 December 2022
2022
2021
Note
£
£
£
Fixed assets
Tangible assets
14
343,130
350,109
Current assets
Stocks
15
13,909,188
10,308,598
Debtors
16
1,297,288
1,388,013
Cash at bank and in hand
2,340,484
1,029,142
---------------
---------------
17,546,960
12,725,753
Creditors: amounts falling due within one year
Bank loans and overdrafts
99,500
92,800
Trade creditors
9,802,978
6,159,045
Other creditors including taxation and social security
17
1,161,794
1,592,909
Accruals and deferred income
948,206
752,185
---------------
---------------
12,012,478
8,596,939
---------------
-------------
Net current assets
5,534,482
4,128,814
-------------
-------------
Total assets less current liabilities
5,877,612
4,478,923
Creditors: amounts falling due after more than one year
Bank loans and overdrafts
188,539
291,449
Provisions
Taxation including deferred tax
19
67,167
66,105
-------------
-------------
Net assets
5,621,906
4,121,369
-------------
-------------
Dalkeith Retail Centre Limited
Statement of Financial Position (continued)
31 December 2022
2022
2021
Note
£
£
£
Capital and reserves
Called up share capital
23
5,050
2
Profit and loss account
24
5,616,856
4,121,367
-------------
-------------
Shareholders funds
5,621,906
4,121,369
-------------
-------------
These financial statements were approved by the board of directors and authorised for issue on 31 October 2023 , and are signed on behalf of the board by:
D Short
Director
Company registration number: SC324402
Dalkeith Retail Centre Limited
Statement of Changes in Equity
Year ended 31 December 2022
Called up share capital
Profit and loss account
Total
£
£
£
At 1 January 2021
2
2,708,123
2,708,125
Profit for the year
1,433,244
1,433,244
----
-------------
-------------
Total comprehensive income for the year
1,433,244
1,433,244
Dividends paid and payable
13
( 20,000)
( 20,000)
----
-------------
-------------
Total investments by and distributions to owners
( 20,000)
( 20,000)
At 31 December 2021
2
4,121,367
4,121,369
Profit for the year
1,600,489
1,600,489
----
-------------
-------------
Total comprehensive income for the year
1,600,489
1,600,489
Issue of shares
5,048
5,048
Dividends paid and payable
13
( 105,000)
( 105,000)
-------
----------
----------
Total investments by and distributions to owners
5,048
( 105,000)
( 99,952)
-------
-------------
-------------
At 31 December 2022
5,050
5,616,856
5,621,906
-------
-------------
-------------
Dalkeith Retail Centre Limited
Statement of Cash Flows
Year ended 31 December 2022
2022
2021
£
£
Cash flows from operating activities
Profit for the financial year
1,600,489
1,433,244
Adjustments for:
Depreciation of tangible assets
109,846
70,778
Other interest receivable and similar income
( 38)
Interest payable and similar expenses
43,344
28,120
Gains on disposal of tangible assets
( 750)
Tax on profit
371,362
327,042
Accrued expenses
196,021
516,178
Changes in:
Stocks
( 3,600,590)
( 7,588,122)
Trade and other debtors
90,725
( 422,621)
Trade and other creditors
3,128,898
5,399,248
-------------
-------------
Cash generated from operations
1,939,307
( 236,133)
Interest paid
( 43,344)
( 28,120)
Interest received
38
Tax paid
( 281,382)
( 120,146)
-------------
----------
Net cash from/(used in) operating activities
1,614,619
( 384,399)
-------------
----------
Cash flows from investing activities
Purchase of tangible assets
( 102,867)
( 351,325)
Proceeds from sale of tangible assets
750
-------------
----------
Net cash used in investing activities
( 102,117)
( 351,325)
-------------
----------
Cash flows from financing activities
Proceeds from issue of ordinary shares
5,048
Proceeds from borrowings
( 101,208)
311,149
Dividends paid
( 105,000)
( 20,000)
-------------
----------
Net cash (used in)/from financing activities
( 201,160)
291,149
-------------
----------
Net increase/(decrease) in cash and cash equivalents
1,311,342
( 444,575)
Cash and cash equivalents at beginning of year
1,029,142
1,473,717
-------------
-------------
Cash and cash equivalents at end of year
2,340,484
1,029,142
-------------
-------------
Dalkeith Retail Centre Limited
Notes to the Financial Statements
Year ended 31 December 2022
1. General information
The company is a private company limited by shares, registered in Scotland. The address of the registered office is 39 - 41 Bonnyrigg Road, Dalkeith, Midlothian, EH22 3HF.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss. The financial statements are prepared in sterling, which is the functional currency of the entity.
Going concern
The financial statements have been prepared on the going concern basis, which assumes that the company will have adequate resources to continue to operate for the foreseeable future. The directors review any measures or events that have the potential to have a significant impact on the company's ability to continue its activities, such as disruption to supply chains. At the time of approval of the financial statements,no issues in this area has been identified. The directors therefore consider it is appropriate to prepare these financial statements on the going concern basis.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Stock The company can hold new vehicles on a sale or return basis, the company recognises this stock as an asset where the risk and rewards of ownership are considered to lie within the company. Judgement is required when assessing whether the risk and rewards of ownership lie within the company. Estimates The preparation of the company's financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are described below. The company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however may change to market changes or or circumstances arising that are beyond the control of the company. Used Vehicles The assessment of the net realisable value of used motor vehicle inventory involves an element of assimilation. The company conducts this assessment by considering age and condition of the vehicle, current model mix and using external market data along with own experience and expectations. As used vehicles values are subject to short term market distortions, a material reduction to carrying values could occur.
Revenue recognition
Turnover represents the amount due for goods sold, for services provided and for finance commissions earned stated net of discounts and value added tax. 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.
Corporation tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Plant and machinery
-
20% straight line
Fixtures and fittings
-
20% straight line
Stocks
Stocks are measured at the lower of cost and net realisable value. Where based on assessment the directors consider that the substance of the manufacturer stocking agreement is such that the risks and rewards of ownership are substantially transferred to the company, the stocks are recognised on the balance sheet and the corresponding liability to the manufacturer is included in within creditors.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset.
Financial instruments
A financial asset or a financial liability is recognised only when the entity becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the amount receivable or payable including any related transaction costs, unless the arrangement constitutes a financial transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Current assets, such as trade debtors and current liabilities, such as trade creditors are subsequently measured at the cash or other consideration expected to be paid or received and not discounted. Cash and and short term deposits in the statement of financial position comprise cash at bank and on hand, which are subject to insignificant change in value. The company has not designated any financial current assets or liabilities as at fair value through profit and loss. Objectives and policies. The company finances its activities with a combination of cash and short term deposits along with some borrowings from the bank and a stocking loan facility where required. Other financial assets and liabilities such as trade debtors and trade creditors, arise directly from the company's operating activities. Price risk, credit risk, liquidity risk and cash flow risk Price Risk Price risk is the risk that changes to the value of stock have the potential to impact on the profitability of the company. The company has polices in place to manage this risk, as laid out in the key estimation and judgement policy. Credit Risk Credit risk is the risk that one party of a financial instrument will cause a financial loss for the other party by failing to discharge it obligation. Company policies are aimed at minimising such losses and require customers to prove credit worthiness prior to purchase of goods. The company does not consider that it is materially exposed to credit risk. Cash flow and liquidity rik Cash flow and liquidity risk is the risk that the company's available cash will not be sufficient to meets its financial obligations. The company actively manages its cash flow position including collection of debts and timely payment of creditors. This coupled by funding provided by a stocking loan facility is deemed sufficient to minimise the company's exposure to cash flow and liquidity risk.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
4. Turnover
Turnover arises from:
2022
2021
£
£
Sale of goods
81,096,213
62,789,452
---------------
---------------
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
5. Other operating income
2022
2021
£
£
Other operating income
2,659
39,500
-------
---------
6. Operating profit
Operating profit or loss is stated after charging/crediting:
2022
2021
£
£
Depreciation of tangible assets
109,846
70,778
Gains on disposal of tangible assets
( 750)
Impairment of trade debtors
27,709
(9,626)
----------
---------
7. Auditor's remuneration
2022
2021
£
£
Fees payable for the audit of the financial statements
10,500
9,000
---------
-------
8. Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
2022
2021
No.
No.
Administrative staff
12
13
Management staff
5
4
Number of sales staff
51
43
Number of service staff
33
28
----
----
101
88
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2022
2021
£
£
Wages and salaries
3,262,523
2,415,595
Social security costs
358,768
257,435
Other pension costs
535,253
66,752
-------------
-------------
4,156,544
2,739,782
-------------
-------------
9. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
2022
2021
£
£
Remuneration
218,150
197,800
Company contributions to defined contribution pension plans
470,852
20,428
----------
----------
689,002
218,228
----------
----------
The number of directors who accrued benefits under company pension plans was as follows:
2022
2021
No.
No.
Defined contribution plans
4
5
----
----
Remuneration of the highest paid director in respect of qualifying services:
2022
2021
£
£
Aggregate remuneration
30,000
97,800
Company contributions to defined contribution pension plans
154,110
1,313
----------
---------
184,110
99,113
----------
---------
10. Other interest receivable and similar income
2022
2021
£
£
Interest on cash and cash equivalents
38
----
----
11. Interest payable and similar expenses
2022
2021
£
£
Interest on banks loans and overdrafts
17,792
13,444
Interest on obligations under finance leases and hire purchase contracts
25,552
14,676
---------
---------
43,344
28,120
---------
---------
12. Tax on profit
Major components of tax expense
2022
2021
£
£
Current tax:
UK current tax expense
370,300
273,865
Deferred tax:
Origination and reversal of timing differences
1,062
53,845
----------
----------
Tax on profit
371,362
327,710
----------
----------
Reconciliation of tax expense
The tax assessed on the profit on ordinary activities for the year is lower than (2021: lower than) the standard rate of corporation tax in the UK of 19 % (2021: 19 %).
2022
2021
£
£
Profit on ordinary activities before taxation
1,971,851
1,760,954
-------------
-------------
Profit on ordinary activities by rate of tax
374,509
334,583
Effect of expenses not deductible for tax purposes
403
1,274
Effect of capital allowances and depreciation
( 3,550)
( 8,147)
-------------
-------------
Tax on profit
371,362
327,710
-------------
-------------
13. Dividends
2022
2021
£
£
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year )
105,000
20,000
----------
---------
14. Tangible assets
Plant and machinery
Fixtures and fittings
Total
£
£
£
Cost
At 1 January 2022
266,504
498,405
764,909
Additions
29,241
73,626
102,867
Transfers
(20,966)
20,966
----------
----------
----------
At 31 December 2022
274,779
592,997
867,776
----------
----------
----------
Depreciation
At 1 January 2022
124,794
290,006
414,800
Charge for the year
41,417
68,429
109,846
Transfers
(8,814)
8,814
----------
----------
----------
At 31 December 2022
157,397
367,249
524,646
----------
----------
----------
Carrying amount
At 31 December 2022
117,382
225,748
343,130
----------
----------
----------
At 31 December 2021
141,710
208,399
350,109
----------
----------
----------
15. Stocks
2022
2021
£
£
Finished goods and goods for resale
13,909,188
10,308,598
---------------
---------------
16. Debtors
2022
2021
£
£
Trade debtors
590,896
673,821
Prepayments and accrued income
242,068
244,004
Other debtors
464,324
470,188
-------------
-------------
1,297,288
1,388,013
-------------
-------------
17. Other creditors including taxation and social security falling
due within one year
2022
2021
£
£
Corporation tax
362,783
273,865
Social security and other taxes
658,615
1,004,609
Director loan accounts
95,002
100,000
Other creditors
45,394
214,435
-------------
-------------
1,161,794
1,592,909
-------------
-------------
Included in other creditors is a stocking loan of £45,393 (2021 - £214,435). This amount is secured over the company stock.
18. Bank loan
The bank loan is secured by a bond and floating charge over the company's assets. In addition the bank holds an intercompany guarantee from Dalkeith Retail Centre Limited of £250,000 as security of the bank debt in Harrisons Retail Centre Limited.
19. Provisions
Deferred tax (note 20)
£
At 1 January 2022
66,105
Additions
1,062
---------
At 31 December 2022
67,167
---------
20. Deferred tax
The deferred tax included in the statement of financial position is as follows:
2022
2021
£
£
Included in provisions (note 19)
67,167
66,105
---------
---------
The deferred tax account consists of the tax effect of timing differences in respect of:
2022
2021
£
£
Accelerated capital allowances
67,167
66,105
---------
---------
21. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 64,401 (2021: £ 46,324 ).
22. Financial instruments
23. Called up share capital
Authorised share capital
2022
2021
No.
£
No.
£
Ordinary shares of £ 1 each
10,000
10,000
100,000
100,000
A Ordinary shares of £ 1 each
10,000
10,000
---------
---------
----------
----------
20,000
20,000
100,000
100,000
---------
---------
----------
----------
Issued, called up and fully paid
2022
2021
No.
£
No.
£
Ordinary shares of £ 1 each
5,000
5,000
2
2
A Ordinary shares of £ 1 each
50
50
-------
-------
----
----
5,050
5,050
2
2
-------
-------
----
----
During the year the company issued 4,998 Ordinary Shares at par and 50 A Ordinary shares at par.
24. Reserves
Profit and loss account - This reserve records retained earnings and accumulated losses.
25. Analysis of changes in net debt
At 1 Jan 2022
Cash flows
At 31 Dec 2022
£
£
£
Cash at bank and in hand
1,029,142
1,311,342
2,340,484
Debt due within one year
(192,800)
(1,702)
(194,502)
Debt due after one year
(291,449)
102,910
(188,539)
-------------
-------------
-------------
544,893
1,412,550
1,957,443
-------------
-------------
-------------
26. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
2022
2021
£
£
Not later than 1 year
43,500
43,500
Later than 1 year and not later than 5 years
160,000
240,000
Later than 5 years
1,324,029
378,000
-------------
----------
1,527,529
661,500
-------------
----------
27. Related party transactions
The company was under the control of Mr W.J. and Mrs J.M. Short throughout the current and previous years. At 31 December 2022, Lothian Brakeways Limited owed the company £35,000 (2021 - £35,000) by way of an intercompany loan. This amount is included in other debtors and is interest free and has no fixed terms of repayment. Lothian Breakways Limited is under the control of Mr and Mrs Short. At 31 December 2022, W & J Short owed the company £73,324 (2021 - £79,187) by way of a loan. This amount is included in other debtors and is interest free and has no fixed terms of repayment. Five directors are partners in this business. During the year Harrisons Retail Centre Limited charged £nil (2021 - £144,000) in management charges to Dalkeith Retail Centre Limited . At 31 December 2022 Harrisons Retail Centre Limited owed £356,000 (2021 - £356,000) by way of an intercompany loan, this amount is interest free and has no fixed terms of repayment. Harrisons Retail Centre Limited is under the control of M Short , I Short and D Short . The company paid Shorts Pension Trust £43,500 (2021 - £43,500) for rent of a property. Members of the Short family are beneficences of this pension trust.. At 31 December 2022, the company was due £95,002 (2021 - £100,000) to Mr W J and Mrs J M Short . This amount is interest free and has no fixed terms of repayment.