Company registration number 01570284 (England and Wales)
EDEN TYRE SALES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
EDEN TYRE SALES LIMITED
COMPANY INFORMATION
Directors
J E Eden
M J Eden
Secretary
G Eden
Company number
01570284
Registered office
5 Prospect Place
Millennium Way
Pride Park
Derby
DE24 8HG
Auditor
Ashgates Corporate Services Limited
5 Prospect Place
Millennium Way
Pride Park
Derby
DE24 8HG
EDEN TYRE SALES LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of income and retained earnings
8
Balance sheet
9
Notes to the financial statements
10 - 23
EDEN TYRE SALES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 1 -
The directors present the strategic report for the year ended 30 June 2023.
Review of the business, development and performance
We aim to present a balanced and comprehensive review of the development and performance of the business during the year and its position at the year end. Our review is consistent with the size and non-complex nature of the business and is written in the context of the risks and uncertainties faced.
The company has enjoyed a very successful trading year recording a substantial increase in pre tax profits. A new Retail site was opened at Gainsborough and the company also acquired the Retail business of Apex Tyres in Peterborough taking the number of Retail sites to 22. The trading performance of the newer Retail sites was significantly better than the previous year and was a key factor in the increased profits generated from Retail. Trading in the Wholesale division continued to recover from the impact of the Covid-19 pandemic with improving demand and stable margins.
Investment continues in online services to make the customer experience and ongoing customer retention as efficient and effective as possible and overall demand for the company’s products and services remains very strong. The company continues to look for prime sites and business acquisition opportunities in areas with growing populations.
The company's key financial and other performance indicators during the year were as follows:
Unit
2023
2022
Turnover
£
43,896,417
39,032,573
Turnover growth
%
12
10
Gross profit margin
%
20
18
Profit before tax
£
3,206,712
2,487,156
Principal risks and uncertainties
Trading overall continues to be competitive and price sensitive. However, the company continues to be well placed to deal with uncertainty and has strong systems and controls to monitor activities on a daily basis and react quickly to any significant changes in market circumstances.
J E Eden
Director
14 February 2024
EDEN TYRE SALES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 2 -
The directors present their annual report and financial statements for the year ended 30 June 2023.
Principal activities
The principal activity of the company is that of Retail Tyre & Servicing centres, which supply vehicle services, brakes, MOT’s, tyres, vehicle repairs and associated products and services; and also tyre wholesale supplying a variety of customers around the Midlands and beyond from a dedicated tyre warehouse.
Results and dividends
The results for the year are set out on page 8.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
J E Eden
M J Eden
Financial instruments
Objectives and policies
The Company is exposed to the following risks from its use of financial instruments:
-Price risk
-Credit risk
-Liquidity risk
-Currency risk
The Directors have overall responsibility for the establishment and oversight of the Company's risk management framework.
The Company does not have a formal risk management policy program. The exposure to the above risks are monitored by the Board of Directors as part of its daily management of the Company activities.
EDEN TYRE SALES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 3 -
Price risk, credit risk, liquidity risk and cash flow risk
Price risk:
The Company has been exposed to Price Risks on a more significant scale than before principally due to the increased cost of inbound shipping of goods from around the world. This situation is closely monitored and selling prices have been increased accordingly to ensure that there has been no margin erosion. Margins across all areas of the business are monitored in detail to identify any adverse margin movements and adjust prices where necessary.
Credit risk:
Credit risk arises when a failure by counter parties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the reporting date. The Company has no significant concentration of credit risk. The Company ensures that sales of products and services are made to customers with an appropriate credit history and monitors on a continuous basis the ageing profile of its receivables.
Liquidity risk:
Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position potentially enhances profitability, but can also increase the risk of losses. The Company has procedures with the object of minimising such losses such as maintaining sufficient cash and other assets.
Currency risk:
Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. Currency risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the Company’s functional currency. The Company is exposed to foreign exchange risk rising from various currency exposures primarily with respect to the Euro and US Dollars. The Company’s management monitors the exchange rate fluctuations on a continuous basis and acts accordingly.
Statement of disclosure to auditor
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
J E Eden
Director
14 February 2024
EDEN TYRE SALES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2023
- 4 -
The directors are responsible for preparing the annual 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 of 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 judgements 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.
EDEN TYRE SALES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF EDEN TYRE SALES LIMITED
- 5 -
Opinion
We have audited the financial statements of Eden Tyre Sales Limited (the 'company') for the year ended 30 June 2023 which comprise the statement of income and retained earnings, the balance sheet 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:
give a true and fair view of the state of the company's affairs as at 30 June 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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.
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 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:
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.
EDEN TYRE SALES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EDEN TYRE SALES 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 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 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.
We are not responsible for preventing irregularities. Our approach to detecting irregularities included, but was not limited to, the following:
• obtaining an understanding of the legal and regulatory framework applicable to the entity and how the entity is complying with that framework;
• obtaining an understanding of the entity's policies and procedures and how the entity has complied with these, through discussions and walkthrough testing;
• obtaining an understanding of the entity's risk assessment process, including the risk of fraud;
• enquiring of management as to actual and potential fraud, litigation and claims;
• designing our audit procedures to respond to our risk assessment;
• performing audit testing over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness and evaluating the business rationale of significant transactions outside the normal course of business;
• assessing whether judgements and assumptions made in determining the accounting estimates set out in note 2 were indicative of potential bias; and
• performing analytical procedures to identify any large, unusual or unexpected relationships.
EDEN TYRE SALES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EDEN TYRE SALES LIMITED
- 7 -
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.
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.
David Mark Newborough (Senior Statutory Auditor)
For and on behalf of Ashgates Corporate Services Limited, Statutory Auditor
5 Prospect Place
Millennium Way
Pride Park
DE24 8HG
15 February 2024
EDEN TYRE SALES LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 30 JUNE 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
43,896,417
39,032,573
Cost of sales
(35,149,429)
(31,815,879)
Gross profit
8,746,988
7,216,694
Administrative expenses
(5,521,572)
(4,714,530)
Other operating income
838
Operating profit
4
3,225,416
2,503,002
Interest receivable and similar income
8
2,692
Interest payable and similar expenses
9
(21,396)
(15,846)
Profit before taxation
3,206,712
2,487,156
Tax on profit
10
(662,618)
(516,914)
Profit for the financial year
2,544,094
1,970,242
Retained earnings brought forward
2,994,155
2,573,913
Dividends
(1,540,000)
(1,550,000)
Retained earnings carried forward
3,998,249
2,994,155
The profit and loss account has been prepared on the basis that all operations are continuing operations.
EDEN TYRE SALES LIMITED
BALANCE SHEET
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
11
540,833
Tangible assets
12
1,911,095
1,396,679
2,451,928
1,396,679
Current assets
Stocks
13
3,487,417
4,081,604
Debtors
14
3,274,700
2,930,171
Cash at bank and in hand
4,411,735
1,816,786
11,173,852
8,828,561
Creditors: amounts falling due within one year
15
(9,109,452)
(6,864,349)
Net current assets
2,064,400
1,964,212
Total assets less current liabilities
4,516,328
3,360,891
Creditors: amounts falling due after more than one year
16
(196,611)
(164,577)
Provisions for liabilities
Deferred tax liability
18
311,468
192,159
(311,468)
(192,159)
Net assets
4,008,249
3,004,155
Capital and reserves
Called up share capital
20
10,000
10,000
Profit and loss reserves
21
3,998,249
2,994,155
Total equity
4,008,249
3,004,155
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true
The financial statements were approved by the board of directors and authorised for issue on 14 February 2024 and are signed on its behalf by:
M J Eden
Director
Company registration number 01570284 (England and Wales)
EDEN TYRE SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
- 10 -
1
Accounting policies
Company information
The company is a private company limited by share capital, incorporated in England.
The address of the registered office is given in the company information on page 1 of these financial statements.
The principal place of activity of the business is Ripley, Derbyshire.
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.
These financial statements are consolidated in the financial statements of Trigon Holdings Limited.
The financial statements of Trigon Group Limited may be obtained from Companies House, Crown Way, Maindy, Cardiff, CF14 3UZ.
Summary of disclosure exemptions
The company has taken advantage of the disclosure exemption in relation to the requirements of section 7 and section 3 paragraph 3.17(d). The equivalent disclosures are included within the consolidated financial statements of the group in which the company is consolidated.
1.2
Business combinations
The cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.
The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.
Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date.
Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.
1.3
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
EDEN TYRE SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 11 -
1.4
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.
Tyre fitting sales are recognised once the tyres are fitted on the customer’s vehicle, vehicle service sales once the service is complete and wholesale tyre sales once the goods are despatched from the warehouse.
1.5
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
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:
Goodwill
20% straight line
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Short leasehold land and buildings
Straight line over the life of the lease
Fixtures and fittings
10%, 20% and 25% straight line
Motor vehicles
25% Straight line
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.
EDEN TYRE SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 12 -
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.
The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.
1.8
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.
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.
EDEN TYRE SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 13 -
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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
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.
EDEN TYRE SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 14 -
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 profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
1.13
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are 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.
Impairment of assets
Upon acquisition, management make an estimation as to the useful economic life of each asset and set a depreciation rate accordingly. On a periodic basis, management makes an estimation of the remaining useful economic lives of assets. Management make such estimations taking into account their knowledge of the assets.
Impairment of stock
Management routinely review stock holdings in order to assess the recoverability of the cost of stocks and the associated impairment. Management calculates impairments by considering the nature and condition of the stocks and applies assumptions around anticipated saleability of the goods.
Impairment of debtors
On a periodic basis management makes an estimation of the recoverability of debtors. Management make such estimations taking into account their knowledge of the customers, connected companies and subsidiary companies of the group.
EDEN TYRE SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 15 -
3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Wholesale
29,040,749
26,969,925
Retail
14,855,668
12,062,648
43,896,417
39,032,573
2023
2022
£
£
Turnover analysed by geographical market
Sales - UK
43,896,417
39,032,573
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(113,373)
36,687
Government grants
-
(838)
Depreciation of owned tangible fixed assets
556,926
491,738
Profit on disposal of tangible fixed assets
(52,901)
(10,250)
Amortisation of intangible assets
9,167
24,519
Operating lease charges
943,681
865,976
Government grants
Government grants received, included within other operating income, relate to the Job Retention Scheme and Retail Assistance Relief from Local Authorities both due to the Covid-19 pandemic.
The amount of grants recognised in the financial statements was £nil (2022 - £838).
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
9,625
8,750
EDEN TYRE SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 16 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administration and support
11
11
Sales
18
19
Other departments
179
158
Total
208
188
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
5,484,556
4,808,939
Social security costs
505,106
434,709
Pension costs
111,981
96,831
6,101,643
5,340,479
7
Directors' remuneration
2023
2022
£
£
Benefits in kind
2,903
2,137
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
2,692
9
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
-
545
Other finance costs:
Interest on finance leases and hire purchase contracts
18,352
15,301
Other interest
3,044
21,396
15,846
EDEN TYRE SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 17 -
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
546,523
449,783
Adjustments in respect of prior periods
(3,214)
(1,133)
Total current tax
543,309
448,650
Deferred tax
Origination and reversal of timing differences
119,309
68,264
Total tax charge
662,618
516,914
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
3,206,712
2,487,156
Expected tax charge based on the standard rate of corporation tax in the UK of 20.50% (2022: 19.00%)
657,376
472,560
Tax effect of expenses that are not deductible in determining taxable profit
18,556
15,462
Adjustments in respect of prior years
(3,214)
(1,133)
UK deferred tax expense
119,309
68,264
Tax decrease from effect of capital allowances and depreciation
(129,409)
(38,239)
Taxation charge for the year
662,618
516,914
EDEN TYRE SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 18 -
11
Intangible fixed assets
Goodwill
£
Cost
At 1 July 2022
218,993
Additions
550,000
At 30 June 2023
768,993
Amortisation and impairment
At 1 July 2022
218,993
Amortisation charged for the year
9,167
At 30 June 2023
228,160
Carrying amount
At 30 June 2023
540,833
At 30 June 2022
12
Tangible fixed assets
Short leasehold land and buildings
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 July 2022
693,372
2,005,609
1,192,656
3,891,637
Additions
223,755
467,606
476,018
1,167,379
Disposals
(274,763)
(274,763)
At 30 June 2023
917,127
2,473,215
1,393,911
4,784,253
Depreciation and impairment
At 1 July 2022
323,673
1,538,311
632,974
2,494,958
Depreciation charged in the year
67,393
225,211
264,322
556,926
Eliminated in respect of disposals
(178,726)
(178,726)
At 30 June 2023
391,066
1,763,522
718,570
2,873,158
Carrying amount
At 30 June 2023
526,061
709,693
675,341
1,911,095
At 30 June 2022
369,699
467,298
559,682
1,396,679
EDEN TYRE SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
12
Tangible fixed assets
(Continued)
- 19 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Fixtures and fittings
16,377
47,306
Motor vehicles
341,686
252,860
358,063
300,166
13
Stocks
2023
2022
£
£
Finished goods and goods for resale
3,487,417
4,081,604
The amount of impairment loss included in profit and loss is £62,544 (2022 - £18,061).
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,752,475
2,370,595
Amounts owed by group undertakings
61,441
Other debtors
732
43,431
Prepayments and accrued income
521,493
454,704
3,274,700
2,930,171
15
Creditors: amounts falling due within one year
2023
2022
£
£
Loans and borrowings
61,062
60,422
Trade creditors
6,497,052
4,240,304
Amounts owed to group undertakings
875,914
1,265,043
Corporation tax
346,173
200,620
Other taxation and social security
1,054,440
883,180
Other creditors
70,811
29,085
Accruals and deferred income
204,000
185,695
9,109,452
6,864,349
EDEN TYRE SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 20 -
16
Creditors: amounts falling due after more than one year
2023
2022
£
£
Loans and borrowings
196,611
164,577
The hire purchase and finance liabilities of £257,673 (2022 - £224,999) shown above as loans and borrowings are secured against the assets which have been purchased under the agreements relating to the liabilities.
17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
61,062
60,422
In two to five years
196,611
164,577
257,673
224,999
The total of future minimum sublease payments expected to be received under non-cancellable subleases at the reporting end date is £670,312 (2022 - £648,951)
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Balances:
£
£
£
£
Accelerated capital allowances
318,902
194,041
-
-
Pension
-
-
7,434
1,882
318,902
194,041
7,434
1,882
2023
Movements in the year:
£
Liability at 1 July 2022
192,159
Charge to profit or loss
119,309
Liability at 30 June 2023
311,468
The amount of the net reversal of deferred tax assets and liabilities expected to occur during the year beginning after the reporting period is £117,690 (2022 - £83,060).
EDEN TYRE SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 21 -
19
Retirement benefit schemes
The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £111,981 (2022 - £84,932).
Contributions totalling £51,475 (2022 - £24,153) were payable to the scheme at the end of the year and are included in creditors.
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
10,000
10,000
10,000
10,000
Rights, preferences and restrictions
Ordinary shares have the following rights, preferences and restrictions:
All shares rank equally, each share entitles each holder to 1 vote, entitles the holder to dividend payments or any due distribution the directors declare, each share entitles the holder pari passu to any return of capital on a pro rate basis, and shares are not to be redeemed or liable to be redeemed, whether at the option of the company or shareholders.
21
Profit and loss reserves
The profit and loss account represents cumulative profits and losses net of dividends and other adjustments.
22
Acquisitions
On 26 May 2023 the company acquired the business of Apex Tyres Limited.
Fair Value
£
Intangible assets
2
Property, plant and equipment
32,998
Total identifiable net assets
33,000
Goodwill
550,000
Total consideration
583,000
Satisfied by:
£
Cash
583,000
EDEN TYRE SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 22 -
23
Operating lease commitments
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
813,342
648,951
Between two and five years
2,498,536
2,037,249
In over five years
2,306,121
979,767
5,617,999
3,665,967
24
Events after the reporting date
Since the balance sheet date dividends have been voted amounting to £1,280,000.
25
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2023
2022
£
£
Aggregate compensation
365,732
347,714
Transactions with related parties
During the year the company entered into the following transactions with other related parties.
Other related parties can be defined as entities which are under common control and/or are members of the same group.
The company has taken advantage of the exemption in FRS102 Section 33 "Related Party Disclosures' from disclosing transactions with other wholly owned members of the group.
Sales
Sales
Purchases
Purchases
2023
2022
2023
2022
£
£
£
£
Sale of goods
-
1,874
-
-
Recharge of expenses
-
60,949
-
-
Purchase of goods
-
-
-
2,067
Property rental
257,083
250,000
EDEN TYRE SALES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
25
Related party transactions
(Continued)
- 23 -
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due (to) / from related parties
£
£
Other related parties
(7,070)
104,872
26
Ultimate controlling party
The company's immediate parent is Trigon Holdings Limited, incorporated in England.
The ultimate parent is Trigon Group Limited, incorporated in England.
These financial statements are available upon request from Companies House, Crown Way, Maindy, Cardiff, CF14 3UZ.
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