Registered number: 00628480
CONSTITUTION MOTORS LIMITED
UNAUDITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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CONSTITUTION MOTORS LIMITED
COMPANY INFORMATION
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CONSTITUTION MOTORS LIMITED
CONTENTS
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Notes to the financial statements
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CONSTITUTION MOTORS LIMITED
CHARTERED ACCOUNTANTS' REPORT TO THE DIRECTOR ON THE PREPARATION OF THE UNAUDITED STATUTORY FINANCIAL STATEMENTS OF CONSTITUTION MOTORS LIMITED
FOR THE YEAR ENDED 31 DECEMBER 2023
In order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the financial statements of Constitution Motors Limited for the year ended 31 December 2023 which comprise the Balance sheet and the related notes from the Company's accounting records and from information and explanations you have given us.
As a practising member firm of the Institute of Chartered Accountants in England and Wales (ICAEW), we are subject to its ethical and other professional requirements which are detailed at https://www.icaew.com /regulation.
This report is made solely to the director of Constitution Motors Limited in accordance with the terms of our engagement letter dated 22 August 2023. Our work has been undertaken solely to prepare for your approval the financial statements of Constitution Motors Limited and state those matters that we have agreed to state to the director of Constitution Motors Limited in this report in accordance with ICAEW Technical Release TECH07/16AAF. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Constitution Motors Limited and its director for our work or for this report.
It is your duty to ensure that Constitution Motors Limited has kept adequate accounting records and to prepare statutory financial statements that give a true and fair view of the assets, liabilities, financial position and loss of Constitution Motors Limited. You consider that Constitution Motors Limited is exempt from the statutory audit requirement for the year.
We have not been instructed to carry out an audit or review of the financial statements of Constitution Motors Limited. For this reason, we have not verified the accuracy or completeness of the accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the statutory financial statements.
MA Partners LLP
Chartered Accountants
7 The Close
Norwich
Norfolk
NR1 4DJ
2 July 2024
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CONSTITUTION MOTORS LIMITED
REGISTERED NUMBER: 00628480
BALANCE SHEET
AS AT 31 DECEMBER 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Capital redemption reserve
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Investment property reserve
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CONSTITUTION MOTORS LIMITED
REGISTERED NUMBER: 00628480
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
The director considers that the Company is entitled to exemption from audit under section 477 of the Companies Act 2006 and members have not required the Company to obtain an audit for the year in question in accordance with section 476 of the Companies Act 2006.
The director acknowledges his responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the profit and loss account in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 2 July 2024.
The notes on pages 4 to 11 form part of these financial statements.
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CONSTITUTION MOTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Constitution Motors Limited is a United Kingdom company limited by shares. It is incorporated and domiciled in England and Wales. The registered office address is 7 The Close, Norwich, NR1 4DJ.
The Company's principal activity is that of retail trade of motor vehicles, parts and accessories. Its principal place of business is Norwich, UK.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland' and the requirements of the Companies Act 2006. The disclosure requirements of Section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The following principal accounting policies have been applied:
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:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
∙the Company has transferred the significant risks and rewards of ownership to the buyer;
∙the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
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CONSTITUTION MOTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Defined contribution pension plan
The Company operates a defined contribution 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 Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.
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Current and deferred taxation
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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 balance sheet date in the countries where the Company operates and generates income.
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CONSTITUTION MOTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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 and reducing balance method.
Depreciation is provided on the following basis:
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S/Term Leasehold Property
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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.
Investment property is carried at fair value determined annually by external valuers and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in profit or loss.
Investments in subsidiaries are measured at cost less accumulated impairment.
Investments in unlisted Company shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Profit and loss account for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.
Stocks are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving stocks.
Stocks include used and demonstrator cars which are reviewed for impairment on an annual basis. Net realisable value is assessed by the directors. Parts stock is valued at cost and reviewed for impairment on an annual basis.
Consignment stock consists of unregistered vehicles legally owned by the maufacturer. Under the agreement with the vehicle manufacturer the company is exposed to obsolescence and slow movement risk and as a result this stock is recognised as an asset in the company's balance sheet.
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CONSTITUTION MOTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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.
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Cash and cash equivalents
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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.
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.
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 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.
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.
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The average monthly number of employees, including directors, during the year was 13 (2022 - 14).
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CONSTITUTION MOTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Charge for the year on owned assets
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Investments in subsidiary companies
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CONSTITUTION MOTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Freehold investment property
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The 2023 valuations were made by the directors on an open market value.
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Net deficit in movement properties
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If the Investment properties had been accounted for under the historic cost accounting rules, the properties would have been measured as follows:
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Prepayments and accrued income
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CONSTITUTION MOTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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The bank loans are secured by way of a personal guarantee as stated in note 11.
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Creditors: Amounts falling due after more than one year
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Allotted, called up and fully paid
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1,217 A Ordinary shares of £1.00 each
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241 B Ordinary shares of £1.00 each
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162 C Ordinary shares of £1.00 each
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CONSTITUTION MOTORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
A prior year adjustment was made to the Company's stocks for the year ended 31 December 2022, which were overstated by £66,509. The tax effect of this is a reduction in the tax charge for the year of £10,368. The effect on the comparative balance sheet is a decrease in stocks of £66,509 and a decrease in the corporation tax creditor of £10,368.
The effect on the opening reserves position as at 1 January 2023 is a decrease in the profit and loss reserve of £56,140.
12.Director's personal guarantees
The directors have given personal guarantees of up to £240,000 as security for the company loan.
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Related party transactions
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As at 31 December 2023 the balance owed to the directors was £2,335 (2022: £7,734). The loan is interest free, repayable on demand and is included within other creditors in note 8 to the financial statements.
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