Company Registration No. NI030918 (Northern Ireland)
CURTIS DEVELOPMENTS LTD.
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023
IDS Chartered Accountants LLP
23/25 Queen Street
COLERAINE
Co Londonderry
BT52 1BG
CURTIS DEVELOPMENTS LTD.
CONTENTS
Page
Company information
1
Strategic report
2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 21
CURTIS DEVELOPMENTS LTD.
COMPANY INFORMATION
- 1 -
Directors
Richard Tannahill
James Tannahill
Valerie Tannahill
Secretary
James Tannahill
Company number
NI030918
Registered office
23/25 Queen Street
COLERAINE
Co Londonderry
BT52 1BG
Auditor
IDS Chartered Accountants LLP
23/25 Queen Street
COLERAINE
Co Londonderry
BT52 1BG
Business address
7a Somerset Road
COLERAINE
Co Londonderry
BT51 3LL
Bankers
Danske Bank
22 The Diamond
COLERAINE
Co Londonderry
BT52 1DE
Solicitors
Mallon & Co
3 Castlerock Road
COLERAINE
Co Londonderry
BT51 3HP
CURTIS DEVELOPMENTS LTD.
STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2023
- 2 -
The directors present the strategic report for the year ended 31 August 2023.
Fair review of the business
The company has endured a financially challenging year due to nationwide economic downturn. In spite of this the company has continued to perform well under difficult trading conditions.
Principal risks and uncertainties
The company faces a number of key risks and uncertainties which the directors endeavour to overcome:
Working capital management - although a key risk to all companies it is of particular importance to Curtis Developments Limited given the level of stock held. The directors will endeavour to further improve stock turnover in the forthcoming periods to ensure sufficient finance is available for the day-to-day operations of the company.
Maintenance of turnover levels - achieving turnover targets is key to the company's success, particularly in relation to vehicle sales. The directors have implemented a sales strategy to achieve this, involving the training of existing employees, developing information systems, improving the company's website, the introduction of target marketing and improving the range of products and services available to customers.
Maintenance of a highly skilled workforce - highly skilled and well motivated employees are critical to the success of the company, in particular the sales personnel that are the face of the company. The company endeavours to attract, retain and motivate highly skilled employees in order to further improve the performance and competitive advantage of the company.
Continuing impact of rising energy costs and inflation.
Increasing cost of used cars and parts due to Brexit.
Financial instruments
As all of the company's sales are in sterling, it does not enter into any hedging activities and it is not exposed to any form of exchange rate risk. The company continues to tighten controls over its debt collection, whilst at the same time negotiating favourable terms with its suppliers.
Key performance indicators
We as directors have determined the following financial indicators to be the most effective measures of progress towards the achievement of company objectives: |
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James Tannahill
Secretary
22 January 2024
CURTIS DEVELOPMENTS LTD.
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 August 2023.
Principal activities
The principal activity of the company continued to be that of motor vehicle sales and servicing.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £30,000. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Richard Tannahill
James Tannahill
Valerie Tannahill
Auditor
The auditor, IDS Chartered Accountants LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
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;
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.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
CURTIS DEVELOPMENTS LTD.
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 4 -
By order of the board
James Tannahill
Secretary
22 January 2024
CURTIS DEVELOPMENTS LTD.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CURTIS DEVELOPMENTS LTD.
- 5 -
Opinion
We have audited the financial statements of Curtis Developments Ltd. (the 'company') for the year ended 31 August 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows 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 31 August 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.
CURTIS DEVELOPMENTS LTD.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CURTIS DEVELOPMENTS LTD. (CONTINUED)
- 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities including fraud and non-compliance with laws and regulations, was as follows:
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the industry;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence.
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations; and
performing analytical procedures to identify any unusual or unexpected relationships;
testing journal entries to identify unusual transactions;
assessing whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias;
investigating the rationale behind significant or unusual transactions.
CURTIS DEVELOPMENTS LTD.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CURTIS DEVELOPMENTS LTD. (CONTINUED)
- 7 -
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statements disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims;
reviewing correspondence with HMRC, relevant regulators and the company's legal advisors.
There are inherent limitations in our audit procedures described above. The more removed laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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.
The purpose of our audit work and to whom we owe our responsibilities
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.
Mr Roger Dallas
Senior Statutory Auditor
For and on behalf of IDS Chartered Accountants LLP
Statutory Auditor
23/25 Queen Street
COLERAINE
Co Londonderry
BT52 1BG
22 January 2024
CURTIS DEVELOPMENTS LTD.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
22,824,935
23,749,545
Cost of sales
(21,971,668)
(22,685,553)
Gross profit
853,267
1,063,992
Administrative expenses
(651,207)
(969,546)
Other operating income
64,765
42,370
Profit before taxation
266,825
136,816
Tax on profit
7
(56,188)
(22,107)
Profit for the financial year
210,637
114,709
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
CURTIS DEVELOPMENTS LTD.
BALANCE SHEET
AS AT 31 AUGUST 2023
31 August 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
2,295,910
2,314,490
Current assets
Stocks
10
3,290,401
2,256,983
Debtors
11
309,438
772,635
Cash at bank and in hand
946,266
1,559,314
4,546,105
4,588,932
Creditors: amounts falling due within one year
12
(1,859,533)
(2,096,933)
Net current assets
2,686,572
2,491,999
Total assets less current liabilities
4,982,482
4,806,489
Provisions for liabilities
Deferred tax liability
13
46,749
51,394
(46,749)
(51,394)
Net assets
4,935,733
4,755,095
Capital and reserves
Called up share capital
14
1,000
1,000
Profit and loss reserves
4,934,733
4,754,095
Total equity
4,935,733
4,755,095
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 22 January 2024 and are signed on its behalf by:
Richard Tannahill
James Tannahill
Director
Director
Company registration number NI030918 (Northern Ireland)
CURTIS DEVELOPMENTS LTD.
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 September 2021
1,000
4,639,386
4,640,386
Year ended 31 August 2022:
Profit and total comprehensive income for the year
-
114,709
114,709
Balance at 31 August 2022
1,000
4,754,095
4,755,095
Year ended 31 August 2023:
Profit and total comprehensive income for the year
-
210,637
210,637
Dividends
8
-
(30,000)
(30,000)
Balance at 31 August 2023
1,000
4,934,733
4,935,733
CURTIS DEVELOPMENTS LTD.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
18
(567,676)
(246,986)
Income taxes paid
(30,164)
(97,920)
Net cash outflow from operating activities
(597,840)
(344,906)
Investing activities
Purchase of tangible fixed assets
(28,824)
(34,283)
Proceeds from disposal of tangible fixed assets
418
13,500
Repayment of loans
43,197
6,288
Net cash generated from/(used in) investing activities
14,791
(14,495)
Financing activities
Dividends paid
(30,000)
Net cash used in financing activities
(30,000)
-
Net decrease in cash and cash equivalents
(613,049)
(359,401)
Cash and cash equivalents at beginning of year
1,559,314
1,918,715
Cash and cash equivalents at end of year
946,266
1,559,314
CURTIS DEVELOPMENTS LTD.
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 12 -
1
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.
2
Accounting policies
Company information
Curtis Developments Ltd. is a private company limited by shares incorporated in Northern Ireland. The registered office is 23/25 Queen Street, COLERAINE, Co Londonderry, BT52 1BG.
2.1
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.
2.2
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.
2.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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.
2.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
CURTIS DEVELOPMENTS LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023
2
Accounting policies
(Continued)
- 13 -
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:
Land and buildings freehold
Nil
Plant and machinery
20% reducing balance
Fixtures, fittings & equipment
20% reducing balance
Office equipment
20% reducing balance
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.
2.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
2.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
2.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
CURTIS DEVELOPMENTS LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
2
Accounting policies
(Continued)
- 14 -
2.8
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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
CURTIS DEVELOPMENTS LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
2
Accounting policies
(Continued)
- 15 -
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.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
2.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
2.10
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.
CURTIS DEVELOPMENTS LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
2
Accounting policies
(Continued)
- 16 -
2.11
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.
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.
2.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
2.13
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
2.14
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.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Vehicle sales
20,698,546
17,816,834
Aftersales parts & service
2,047,829
5,846,139
Other
78,560
86,572
22,824,935
23,749,545
2023
2022
£
£
Turnover analysed by geographical market
Northern Ireland
22,824,935
23,749,545
2023
2022
£
£
Other revenue
Grants received
-
797
CURTIS DEVELOPMENTS LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 17 -
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Coleraine
4
6
Ballymena
31
28
Total
35
34
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
958,466
1,019,340
Social security costs
89,885
91,587
Pension costs
16,851
337,218
1,065,202
1,448,145
5
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
32,440
44,924
Company pension contributions to defined contribution schemes
-
320,000
32,440
364,924
6
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
66
Government grants
-
(797)
Fees payable to the company's auditor for the audit of the company's financial statements
9,150
9,000
Depreciation of owned tangible fixed assets
46,986
51,377
(Profit)/loss on disposal of tangible fixed assets
-
2,161
Operating lease charges
13,335
9,053
CURTIS DEVELOPMENTS LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 18 -
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
60,833
30,164
Deferred tax
Origination and reversal of timing differences
(4,645)
(8,057)
Total tax charge
56,188
22,107
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
266,825
136,816
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
66,706
25,995
Permanent capital allowances in excess of depreciation
(5,873)
4,169
Deferred tax movement in year
(4,645)
(8,057)
Taxation charge for the year
56,188
22,107
8
Dividends
2023
2022
£
£
Final paid
30,000
CURTIS DEVELOPMENTS LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 19 -
9
Tangible fixed assets
Land and buildings freehold
Plant and machinery
Fixtures, fittings & equipment
Office equipment
Total
£
£
£
£
£
Cost
At 1 September 2022
2,108,914
435,568
55,775
24,975
2,625,232
Additions
21,993
6,831
28,824
Disposals
(418)
(418)
At 31 August 2023
2,108,914
457,143
62,606
24,975
2,653,638
Depreciation and impairment
At 1 September 2022
272,498
25,283
12,961
310,742
Depreciation charged in the year
37,076
7,465
2,445
46,986
At 31 August 2023
309,573
32,748
15,407
357,728
Carrying amount
At 31 August 2023
2,108,914
147,570
29,858
9,568
2,295,910
At 31 August 2022
2,108,914
163,070
30,492
12,014
2,314,490
10
Stocks
2023
2022
£
£
Parts
62,749
8,246
Work in progress
27,352
10,191
Finished goods and goods for resale
3,200,300
2,238,546
3,290,401
2,256,983
The company holds stock of new vehicles on consignment from the manufacturers. These remain the property of the manufacturer until sold. No amounts for the stock or the liability to the manufacturer are entered in the financial statements until the stocks are acquired by this company. The amount of consignment stocks held at the year end was £586,529 (2022: £205,367).
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
274,361
562,146
Other debtors
140,660
Prepayments and accrued income
35,077
69,829
309,438
772,635
CURTIS DEVELOPMENTS LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 20 -
12
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
1,316,995
1,387,839
Corporation tax
60,833
30,164
Other taxation and social security
37,151
153,342
Other creditors
12,663
3,095
Accruals and deferred income
431,891
522,493
1,859,533
2,096,933
13
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Capital allowances
46,749
51,394
2023
Movements in the year:
£
Liability at 1 September 2022
51,394
Credit to profit or loss
(4,645)
Liability at 31 August 2023
46,749
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
14
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,000
1,000
1,000
1,000
CURTIS DEVELOPMENTS LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 21 -
15
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
16,851
337,218
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
16
Ultimate controlling party
The ultimate controlling party is Mr J Tannahill.
17
Analysis of changes in net funds
1 September 2022
Cash flows
31 August 2023
£
£
£
Cash at bank and in hand
1,559,314
(613,048)
946,266
18
Cash absorbed by operations
2023
2022
£
£
Profit for the year after tax
210,637
114,709
Adjustments for:
Taxation charged
56,188
22,107
(Gain)/loss on disposal of tangible fixed assets
-
2,161
Depreciation and impairment of tangible fixed assets
46,986
51,377
Movements in working capital:
(Increase)/decrease in stocks
(1,033,418)
5,706
Decrease/(increase) in debtors
420,000
(358,717)
Decrease in creditors
(268,069)
(84,329)
Cash absorbed by operations
(567,676)
(246,986)
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