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Registered number: 08479726










OTTO CAR LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2023

 
OTTO CAR LIMITED
 
 
COMPANY INFORMATION


Director
G S Dhillon 




Registered number
08479726



Registered office
3 Sussex Place

Hammersmith

London

W6 9EA




Independent auditors
MHA
Statutory Auditors

6th Floor

2 London Wall Place

London

EC2Y 5AU





 
OTTO CAR LIMITED
 

CONTENTS



Page
Strategic Report
1 - 2
Director's Report
3 - 4
Independent Auditors' Report
5 - 8
Statement of Comprehensive Income
9
Statement of Financial Position
10 - 11
Statement of Changes in Equity
12
Notes to the Financial Statements
13 - 29


 
OTTO CAR LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023

Introduction
 
The principal activity of the company is renting and funding private hire licensed vehicles on short and long term hire through two programs: short term rentals and Rent to Buy program providing a one stop solution for finance, insurance and maintenance.

Business review
 
The key financial and other performance indicators during the year were as follows:

                                           
2023        2022
Turnover                             £43.7m     £30.5m
Gross profit margin              26.9%       35.1%
The group remains profitable and we are investing heavily in fleet and risk proprietary technology with our in-house software development team to further enhance our competitive advantage. This investment in developing our own technology will help us to maintain and manage our growth trajectory over the coming years.
We are Europe’s largest electric private hire fleet and our stated aim is to maintain our dominant position in the marketplace through providing great customer service and meeting the needs of our customers with the right product mix of vehicles.
We have covered over 100 million electric miles in the preceding 12 months in our fleet of electric vehicles and we aim to double this in the coming years.
Whilst there has been a drop off in demand for electric vehicles in the wider consumer market, this has had no impact on demand in the private hire market as Transport for London legislation stipulates that all new vehicles licensed must be zero emission compliant. The continued consumer demand has allowed us to negotiate stronger terms with car manufacturers for new orders. 

Page 1

 
OTTO CAR LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023

Principal risks and uncertainties
 
Economic Risk
Given the current inflationary pressure and high interest rates there is a risk that there may be an impact on customer earnings from a slowdown in the wider economy.  Currently however customer earnings remain strong with arrears and defaults in line with projections.  We have not seen any substantial increase in defaults or vehicle returns. Fleet utilization remains high and collections strong.
Credit Risk
Credit risk is the risk that a counter party will not meet its obligations under our existing financial contracts leading to a financial loss.  The company is exposed to credit risk from its operating activities and from its financing activities including deposits with banks.  The company manages its credit risk by ensuring that it is exposed only to customers and financial institutions with good credit quality which is based on their credit rating.
Liquidity Risk
Liquidity risk is the risk that the company will encounter difficulty in meeting its obligations associated with its financial liabilities that are settled by delivering cash or another financial asset.  The company’s approach to managing liquidity is to meet its liability when due under normal and stressed conditions, without incurring unacceptable losses or risk damage to the company’s reputation by maintaining strong cash balances and punctual collection of weekly rentals.
Cyber Risk
There is a risk that the Group could be targeted by a cyber attack.  We have implemented a number of security policies and measures to protect customer data in line with GDPR guidance to mitigate this risk  
Supply Risk
Supply constraints for new vehicles have eased over the last 12 months and we are working with a wider number of car manufacturers to ensure a constant pipeline of vehicles to meet customer demands.  


This report was approved by the board and signed on its behalf.



................................................
G S Dhillon
Director

Date: 29 March 2024

Page 2

 
OTTO CAR LIMITED
 
 
 
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 MARCH 2023

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

Director's responsibilities statement

The director is responsible for preparing the Strategic Report, the Director's 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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:


select suitable accounting policies for the Company's financial statements 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 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 to enable him to ensure that the financial statements comply with the Companies Act 2006He 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.

Results and dividends

The profit for the year, after taxation, amounted to £3,149,571 (2022 - £3,801,632).

Dividends are detailed in note 11.

Director

The director who served during the year was:

G S Dhillon 

Future developments

Transport for London legislation requires all newly licensed private hire vehicles after January 1st 2023 to be zero emission compliant. In addition, ride hailing providers such as Uber are committed to having their vehicle fleet in London be 100% battery electric compliant by 2025 Therefore, we see significant opportunities for growth over the coming years given the size of Uber’s fleet in London and Otto Car being the largest provider of electric vehicles to the London market.

Page 3

 
OTTO CAR LIMITED
 
 
 
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023

Qualifying third party indemnity provisions

Director's liability and indemnity insurance was in force throughout the year to cover the directors and officers of the company against actions brought against them in their personal capacities. Cover is not provided where the individual has acted fraudulently or dishonestly.

Disclosure of information to auditors

The director at the time when this Director's Report is approved has confirmed that:
 
so far as  is aware, there is no relevant audit information of which the Company's auditors are unaware, and

 has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Auditors

Under section 487(2) of the Companies Act 2006MHA will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.

This report was approved by the board29 March 2024 and signed on its behalf.
 





................................................
G S Dhillon
Director

Page 4

 
OTTO CAR LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OTTO CAR LIMITED
 

Opinion


We have audited the financial statements of Otto Car Limited (the 'Company') for the year ended 31 March 2023, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe 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 31 March 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.


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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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.


Page 5

 
OTTO CAR LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OTTO CAR LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and  our Auditors' 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.


Opinion 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 Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Director's 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 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:


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 director's 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 Director's Responsibilities Statement set out on page 3, 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 have no realistic alternative but to do so.


Page 6

 
OTTO CAR LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OTTO CAR LIMITED (CONTINUED)


Auditors' 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 Auditors' 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:

• Obtaining an understanding of the legal and regulatory frameworks that the company operates in;
• Reviewing key correspondence with regulatory authorities;
• Testing for evidence of management override;
• Enquiry of management to identify any instances of non-compliance with laws and regulations;
• Enquiry of management around actual and potential litigation and claims;
• Enquiry of management to identify any instances of known or suspected instances of fraud;
• Discussing among the engagement team regarding how and where fraud might occur.
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 misstatement in the financial statements or non-compliance with regulation. This 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.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.


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 2006Our 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 Auditors' 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.


Page 7

 
OTTO CAR LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OTTO CAR LIMITED (CONTINUED)





Georgette Alicia Crisp BSc (Hons) FCA (Senior Statutory Auditor)
  
for and on behalf of
MHA
 
Statutory Auditors
  
London, United Kingdom

29 March 2024
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales
(registered number OC312313).
Page 8

 
OTTO CAR LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023

As restated
2023
2022
Note
£
£

  

Turnover
 4 
43,683,888
30,522,250

Cost of sales
  
(31,931,791)
(19,823,176)

Gross profit
  
11,752,097
10,699,074

Administrative expenses
  
(5,201,152)
(3,512,223)

Other operating income
  
-
37,331

Operating profit
  
6,550,945
7,224,182

Interest receivable and similar income
 9 
74,639
11,397

Interest payable and similar expenses
 10 
(2,869,090)
(1,648,586)

Profit before tax
  
3,756,494
5,586,993

Tax on profit
 11 
(606,923)
(1,785,361)

Profit for the financial year
  
3,149,571
3,801,632

Other comprehensive income for the year
  

Total comprehensive income for the year
  
3,149,571
3,801,632

The notes on pages 13 to 29 form part of these financial statements.

Page 9

 
OTTO CAR LIMITED
REGISTERED NUMBER: 08479726

STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023

As restated
2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 13 
59,270,290
46,714,758

Investments
 14 
1,000
1,000

  
59,271,290
46,715,758

Current assets
  

Stocks
 15 
19,680
-

Debtors: amounts falling due after more than one year
 16 
377,175
-

Debtors: amounts falling due within one year
 16 
6,478,980
987,061

Cash at bank and in hand
 17 
9,407,160
10,344,335

  
16,282,995
11,331,396

Creditors: amounts falling due within one year
 18 
(21,284,870)
(14,148,951)

Net current liabilities
  
 
 
(5,001,875)
 
 
(2,817,555)

Total assets less current liabilities
  
54,269,415
43,898,203

Creditors: amounts falling due after more than one year
 19 
(38,898,058)
(31,276,661)

Provisions for liabilities
  

Deferred tax
  
(2,653,512)
(3,053,268)

  
 
 
(2,653,512)
 
 
(3,053,268)

Net assets
  
12,717,845
9,568,274


Capital and reserves
  

Called up share capital 
 23 
1,000
1,000

Profit and loss account
 24 
12,716,845
9,567,274

  
12,717,845
9,568,274


Page 10

 
OTTO CAR LIMITED
REGISTERED NUMBER: 08479726
    
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 MARCH 2023

The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




................................................
G S Dhillon
Director

Date: 29 March 2024

The notes on pages 13 to 29 form part of these financial statements.

Page 11

 
OTTO CAR LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 April 2021
1,000
5,815,642
5,816,642



Profit for the year

-
3,801,632
3,801,632

Dividends
-
(50,000)
(50,000)



At 1 April 2022
1,000
9,567,274
9,568,274



Profit for the year
-
3,149,571
3,149,571


At 31 March 2023
1,000
12,716,845
12,717,845


The notes on pages 13 to 29 form part of these financial statements.

Page 12

 
OTTO CAR LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

1.


General information

Otto Car Limited is a private company, limited by shares, registered in England and Wales. The company's registered number and registered address can be found on the Company Information page of the financial statements.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The financial statements are presented in pounds sterling, the functional currency, rounded to the nearest £1.
Otto Car Limited is a parent entity, note 14.  It is also a subsidiary entity of Otto Group Holdings Limited, a company incorporated in England and Wales.  Otto Car Limited has not prepared group financial statements.  These are the financial statements of the company not the group. 

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Otto Group Holdings Limited as at 31 March 2023 and these financial statements may be obtained from Companies House.

Page 13

 
OTTO CAR LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.3

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

 
2.4

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.5

Leased assets: the Company as lessor

Where assets leased to a third party give rights approximating to ownership (finance lease), the lessor recognises as a receivable an amount equal to the net investment in the lease i.e. the minimum lease payments receivable under the lease discounted at the interest rate implicit in the lease. This receivable is reduced as the lessee makes capital payments over the term of the lease.

A finance lease gives rise to two types of income: profit or loss equivalent to the profit or loss resulting from outright sale of the asset being leased, at normal selling prices, reflecting any applicable discounts, and finance income over the lease term.

 
2.6

Leased assets: the Company as lessee

Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

Page 14

 
OTTO CAR LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.7

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

 
2.8

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.

 
2.9

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.10

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.11

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

 
2.12

Pensions

Defined contribution pension plan

The Company operates a defined contribution pension plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.

Page 15

 
OTTO CAR LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.13

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

 
2.14

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Motor vehicles
-
20%
Fixtures and fittings
-
20%
Office equipment
-
20%

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.15

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Page 16

 
OTTO CAR LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)

 
2.16

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.17

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.18

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.19

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.

 
2.20

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income.
Page 17

 
OTTO CAR LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

2.Accounting policies (continued)


2.20
Financial instruments (continued)


For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the reporting date.

Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is an 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.

 
2.21

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The director considers that the critical accounting policies where judgments have been applied relate to the tangible asset lives, in particular the useful economic life and residual values of plant and machinery, and the recoverability of trade debtors. The director has concluded that the asset values and residual values are appropriate for motor vehicles and that trade debtors are appropriately valued.

Page 18

 
OTTO CAR LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

4.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Lease and rental income
43,683,888
30,522,250

43,683,888
30,522,250


2023
2022
£
£

United Kingdom
43,683,888
30,522,250

43,683,888
30,522,250


All turnover arose within the United Kingdom.


5.


Other operating income

2023
2022
£
£

Government grants receivable
-
37,331

-
37,331



6.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Research & development charged as an expense
24,028
30,930

Other operating lease rentals
370,803
278,726

Page 19

 
OTTO CAR LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

7.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors and their associates:


2023
2022
£
£

Fees payable to the Company's auditors and their associates in respect of:

Audit-related assurance services
12,000
8,000

Non audit services
6,500
9,000


8.


Employees

Staff costs were as follows:


2023
2022
£
£

Wages and salaries
2,407,844
1,932,452

Social security costs
250,971
186,799

Cost of defined contribution scheme
44,676
37,311

2,703,491
2,156,562


The average monthly number of employees, including the director, during the year was as follows:


        2023
        2022
            No.
            No.







Admin staff
70
65


9.


Interest receivable

2023
2022
£
£


Other interest receivable
74,639
11,397

74,639
11,397

Page 20

 
OTTO CAR LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

10.


Interest payable and similar expenses

2023
2022
£
£


Hire purchase contracts
2,869,090
1,648,586

2,869,090
1,648,586


11.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
1,006,679
-


1,006,679
-


Total current tax
1,006,679
-


Origination and reversal of timing differences
(399,756)
1,785,361

Total deferred tax
(399,756)
1,785,361


Tax on profit
606,923
1,785,361
Page 21

 
OTTO CAR LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
 
11.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2022 - higher than) the standard rate of corporation tax in the UK of 19% (2022 - 19%). The differences are explained below:

2023
As restated 2022
£
£


Profit on ordinary activities before tax
3,756,494
5,586,993


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2022 - 19%)
713,734
1,061,529

Effects of:


Expenses not deductible for tax purposes
315,499
121,478

Capital allowances for year in excess of depreciation
1,952,774
(4,113,155)

Utilisation of tax losses
(1,956,680)
-

Income not taxble for tax purposes
-
(2,165)

Short-term timing difference leading to an increase (decrease) in taxation
(399,756)
1,671,733

Unrelieved tax losses carried forward
-
3,045,941

Group relief
(18,648)
-

Total tax charge for the year
606,923
1,785,361


Factors that may affect future tax charges

The rate of coproration tax rate increased as of 1 April 2023 to 25%.


12.


Dividends

2023
2022
£
£


Ordinary shares of 1 each
-
50,000

-
50,000

Page 22

 
OTTO CAR LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

13.


Tangible fixed assets





Motor vehicles
Fixtures and fittings
Office equipment
Total

£
£
£
£



Cost or valuation


At 1 April 2022 - as restated
72,373,408
37,269
30,016
72,440,693


Additions
32,449,148
-
-
32,449,148


Disposals
(9,846,625)
-
-
(9,846,625)



At 31 March 2023

94,975,931
37,269
30,016
95,043,216



Depreciation


At 1 April 2022 - as restated
25,682,582
27,418
15,935
25,725,935


Charge for the year
-
7,454
6,003
13,457


Charge for the year on HP assets
17,515,602
-
-
17,515,602


Disposals
(7,482,068)
-
-
(7,482,068)



At 31 March 2023

35,716,116
34,872
21,938
35,772,926



Net book value



At 31 March 2023
59,259,815
2,397
8,078
59,270,290



At 31 March 2022 - as restated
46,690,826
9,851
14,081
46,714,758

Included within the net book value of motor vehicles of £59,083,687 (2022: £46,690,826 - as restated), is £55,794,687 (2022: £42,569,821) relating to assets held under hire purchase agreements. The depreciation charged to the financial statements in the year in respect of such assets amounted to £16,512,626 (2022: £10,406,545).
Additions to motor vehicles of £32,449,148, were partly financed through new hire purchase agreements of £31,486,102. Disposals of £7,873,323 resulted in the early termination of £1,340,481 worth of agreements. 

Page 23

 
OTTO CAR LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

14.


Fixed asset investments





Investments in subsidiary companies

£



Cost or valuation


At 1 April 2022
394,320



At 31 March 2023

394,320



Impairment


At 1 April 2022
393,320



At 31 March 2023

393,320



Net book value



At 31 March 2023
1,000



At 31 March 2022
1,000


Subsidiary undertaking


The following was a subsidiary undertaking of the Company:

Name

Registered office

Class of shares

Holding

Premier Cabs (White City) Limited
3 Sussex Place, London, England, W6 9EA
Ordinary
100%


15.


Stocks

2023
2022
£
£

Finished goods and goods for resale
19,680
-

19,680
-




Page 24

 
OTTO CAR LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

16.


Debtors

2023
2022
£
£

Due after more than one year

Prepayments and accrued income
377,175
-

377,175
-


2023
2022
£
£

Due within one year

Trade debtors
2,201,032
232,856

Amounts owed by group undertakings
2,538,650
-

Other debtors
633,175
754,205

Prepayments and accrued income
1,106,123
-

6,478,980
987,061



17.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
9,407,160
10,344,335

9,407,160
10,344,335


Page 25

 
OTTO CAR LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

18.


Creditors: Amounts falling due within one year

2023
2022
£
£

Bank loans
800,000
-

Trade creditors
647,788
416,780

Corporation tax
1,006,679
-

Other taxation and social security
1,249,116
63,433

Obligations under hire purchase contracts
16,716,888
13,426,599

Other creditors
129,330
165,358

Accruals and deferred income
735,069
76,781

21,284,870
14,148,951


Obligations under hire purchase agreements are secured on the assets to which they relate.
Bank loans of £800,000 relate to The Coronavirus Business Interruption Loan Scheme and are secured by a debenture over the assets held by the company. The director has given a personal guarantee in relation to this loan limited to £400,000. 


19.


Creditors: Amounts falling due after more than one year

2023
2022
£
£

Bank loans
2,066,666
3,733,333

Net obligations under hire purchase contracts
36,831,392
27,543,328

38,898,058
31,276,661


Obligations under hire purchase contracts are secured on the assets to which they relate.
Bank loans of £2,066,666 (2022: £3,733,333) relate to The Coronavirus Business Interruption Loan Scheme and are secured by a debenture over the assets held by the company. The director has given a personal guarantee in relation to this loan limited to £400,000. 

Page 26

 
OTTO CAR LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

20.


Loans


Analysis of the maturity of loans is given below:


2023
2022
£
£

Amounts falling due within one year

Bank loans
800,000
-


800,000
-

Amounts falling due 1-2 years

Bank loans
2,066,666
3,733,333


2,066,666
3,733,333



2,866,666
3,733,333



21.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

2023
2022
£
£


Within one year
19,314,433
15,395,581

Between 1-5 years
40,008,658
29,337,496

59,323,091
44,733,077

The hire purchases are secured by the lessors' title to the leased assets which have a carrying value of £55,794,687 (2022: £42,569,821).
The difference of £5,774,811 (2022: £3,778,226) between net obligations under hire purchases included in creditors of £53,548,289 (2022: £40,954,851) and the totals above relate to future interest payable. 

Page 27

 
OTTO CAR LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

22.


Deferred taxation




2023


£






At beginning of year (as restated)
(3,053,268)


Charged to profit or loss
399,756



At end of year
(2,653,512)

The provision for deferred taxation is made up as follows:

2023
As restated 2022
£
£


Accelerated capital allowances
(2,653,512)
(3,053,268)

(2,653,512)
(3,053,268)


23.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



1,000 (2022 - 1,000) Ordinary shares of £1.00 each
1,000
1,000



24.


Reserves

Profit and loss account

The profit and loss account is represented by retained earnings. Changes in reserves are set out in the Statement of Changes in Equity.


25.


Pension commitments

The company operates a defined contribution pension scheme. The assets of the scheme are held
separately from those of the company in an independently administered fund. The pension cost charge
represents contributions payable by the company to the fund in the period and amounted to £44,676 (2022
- £37,311). Contributions totaling £13,040 (2022 - £11,380) were payable to the fund at the balance sheet date and are included in creditors.

Page 28

 
OTTO CAR LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023

26.


Related party transactions

The company has taken advantage of the exemption available under paragraph 33.1A of the Financial Reporting Standard 102 not to disclose transactions with other wholly owned members of the Group.
Included in other debtors at the balance sheet date is a loan to the director of £275,000. The loan bears interest at commercial rates and is repayable on demand. 


27.


Parent entity and controlling party

On 24 October 2022 the company was acquired by Otto Group Holdings Limited in a share for share agreement with the director and sole shareholder Mr G S Dhillion. The registered office of Otto Group Holdings Limited is 3 Sussex Place, London, W6 9EA. 
The company was under the control of Mr G S Dhillon throughout the current and prior period.


28.


Prior year adjustment

During the year, the director identified an error in the net book value of motor vehicles brought forward from the prior period. The comparatives in the Statement of Comprehensive Income and Statement of Financial Position have been restated for this error, which has resulted in an increase to the net book value of motor vehicles of £598,042 and a decrease in cost of sales and subsequent increase in the company's retained earnings of the same amount. This adjustment resulted in an increase to the deferred tax provision in the prior year of £1,400,075 and an increase the the tax charge and subsequent decrease in the company's retained earnings of the same amount.

 
Page 29