Registered number:
FOR THE YEAR ENDED 31 MARCH 2023
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OTTO CAR LIMITED
COMPANY INFORMATION
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OTTO CAR LIMITED
CONTENTS
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OTTO CAR LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
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.
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.
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OTTO CAR LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
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.
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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.
The director is responsible for preparing the Strategic Report, the Director's Report and the financial statements in accordance with applicable law and regulations.
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 2006. He is also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £3,149,571 (2022 - £3,801,632).
Dividends are detailed in note 11.
The director who served during the year was:
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.
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OTTO CAR LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
There have been no significant events affecting the Company since the year end.
Under section 487(2) of the Companies Act 2006, MHA 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 board
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OTTO CAR LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OTTO CAR LIMITED
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 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).
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.
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.
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OTTO CAR LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OTTO CAR LIMITED (CONTINUED)
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.
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.
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.
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OTTO CAR LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OTTO CAR LIMITED (CONTINUED)
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.
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 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.
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OTTO CAR LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF OTTO CAR LIMITED (CONTINUED)
for and on behalf of
Statutory Auditors
London, United Kingdom
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313).
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OTTO CAR LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
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OTTO CAR LIMITED
REGISTERED NUMBER: 08479726
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023
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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:
The notes on pages 13 to 29 form part of these financial statements.
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OTTO CAR LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
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OTTO CAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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
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:
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.
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OTTO CAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
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OTTO CAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
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. Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.
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OTTO CAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
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:
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.
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OTTO CAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
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.
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OTTO CAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
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OTTO CAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Page 19
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OTTO CAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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OTTO CAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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OTTO CAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
11.Taxation (continued)
The rate of coproration tax rate increased as of 1 April 2023 to 25%.
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OTTO CAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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OTTO CAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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OTTO CAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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OTTO CAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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OTTO CAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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OTTO CAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Profit and loss account
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.
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OTTO CAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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.
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.
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