UNITED AUTOSPORTS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Company Registration No. 06966350 (England and Wales)
UNITED AUTOSPORTS LIMITED
COMPANY INFORMATION
Directors
Z C Brown
R A Dean
Company number
06966350
Registered office
Rosie Road
Normanton
Wakefield
WF6 1ZB
Auditor
Azets Audit Services
Carlton House
Grammar School Street
Bradford
BD1 4NS
Business address
Rosie Road
Normanton
Wakefield
WF6 1ZB
UNITED AUTOSPORTS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 26
UNITED AUTOSPORTS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Fair review of the business
The company is a private Limited company and is predominantly funded by its shareholders. The company's principal activity of the company remains that of a motorsports racing team, however the company’s activities also include the promotion and marketing of motor racing drivers, sale of specialised race wear and the restoration of historic motor vehicles.
The Directors consider the trading performance to be reasonable and in line with their expectations. The company results for the year ended 31 December 2023 show an overall post tax profit/(loss) of £380,889 (2022 - £(51,590) loss) and total shareholders funds amounting to £2,383,977 (2022 - £2,003,088). The directors consider the trading performance to be reasonable.
Description of principal risks and uncertainties
The process of risk acceptance and management is addressed through a framework of policies, procedures and internal control. All policies are subject to management approval and ongoing review.
The business remains subject to world economic performance and political issues. The directors consider that the key business risks and uncertainties affecting the company are considered to relate to supply issues, competition, performance, currency market forces in relation to the ongoing dealings with Brexit fallout and the cost of living crisis and rising supply chain costs either directly or indirectly as a result of the war in Ukraine. The directors are continually reviewing the exposure of all key risks in order to minimise any potential impact on the business.
Analysis based on key performance indicators
The directors use a number of key indicators as part of a much wider reporting framework that enables them to understand the development, performance and position of the business. The directors feel that due to the continual variation in race series entered and the varied income streams year on year, performance ratios/values would not prove to be a reliable assessment tool.
Bank facilities
The company continues to meet its working capital needs by utilising and working within agreed banking facilities. The directors have made reasonable enquiries, including a review of existing customer and supplier relationships and future financial forecast to enable them to form a reasonable expectation that the company has adequate reserves and financial facilities to continue in operational existence for the foreseeable future, whilst allowing for the repayment of bank loans. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
Future plans
The directors continue to focus on the continued success of the motor racing teams which the company runs in various motor racing series and continue to review the viability of the company expanding in to further series assessing the potential for the company to gain success in those series. The directors also wish to expand the business through the other income steams expanding these where possible.
R A Dean
Director
30 July 2024
UNITED AUTOSPORTS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of motorsport racing team.
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Z C Brown
R A Dean
Auditor
Azets Audit Services Limited, trading as Azets Audit Services, were appointed auditor to the company following their acquisition of the trade of Naylor Wintersgill Limited, on 1 May 2023. In accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
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.
On behalf of the board
R A Dean
Director
30 July 2024
UNITED AUTOSPORTS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
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.
UNITED AUTOSPORTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF UNITED AUTOSPORTS LIMITED
- 4 -
Opinion
We have audited the financial statements of United Autosports Limited (the 'company') for the year ended 31 December 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 December 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.
UNITED AUTOSPORTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF UNITED AUTOSPORTS LIMITED
- 5 -
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.
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.
UNITED AUTOSPORTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF UNITED AUTOSPORTS LIMITED
- 6 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
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 of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
Victoria Wainwright
Senior Statutory Auditor
For and on behalf of Azets Audit Services
30 July 2024
Chartered Accountants
Statutory Auditor
Carlton House
Grammar School Street
Bradford
BD1 4NS
UNITED AUTOSPORTS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
18,805,872
16,042,821
Cost of sales
(15,511,960)
(13,969,675)
Gross profit
3,293,912
2,073,146
Administrative expenses
(3,652,949)
(3,545,546)
Other operating income
2,057
6,587
Operating loss
6
(356,980)
(1,465,813)
Interest receivable and similar income
7
5,257
87
Interest payable and similar expenses
8
(9,796)
(5,515)
Amounts written off investments
9
249,771
659,177
Loss before taxation
(111,748)
(812,064)
Tax on loss
11
492,637
760,474
Profit/(loss) for the financial year
380,889
(51,590)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
UNITED AUTOSPORTS LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
2,865,349
2,430,704
Investments
13
71
271
2,865,420
2,430,975
Current assets
Stocks
15
560,272
304,736
Debtors
17
4,653,930
3,100,732
Cash at bank and in hand
1,379,508
654,494
6,593,710
4,059,962
Creditors: amounts falling due within one year
18
(6,385,268)
(4,056,067)
Net current assets
208,442
3,895
Total assets less current liabilities
3,073,862
2,434,870
Creditors: amounts falling due after more than one year
19
(456)
Provisions for liabilities
Deferred tax liability
21
689,885
431,326
(689,885)
(431,326)
Net assets
2,383,977
2,003,088
Capital and reserves
Called up share capital
23
100
100
Profit and loss reserves
2,383,877
2,002,988
Total equity
2,383,977
2,003,088
The financial statements were approved by the board of directors and authorised for issue on 30 July 2024 and are signed on its behalf by:
R A Dean
Director
Company Registration No. 06966350
UNITED AUTOSPORTS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
100
2,695,530
2,695,630
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
(51,590)
(51,590)
Dividends
10
-
(640,952)
(640,952)
Balance at 31 December 2022
100
2,002,988
2,003,088
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
380,889
380,889
Balance at 31 December 2023
100
2,383,877
2,383,977
UNITED AUTOSPORTS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
28
886,901
107,045
Interest paid
(9,796)
(5,515)
Income taxes refunded
777,841
1,225,266
Net cash inflow from operating activities
1,654,946
1,326,796
Investing activities
Purchase of tangible fixed assets
(1,473,511)
(655,993)
Proceeds on disposal of tangible fixed assets
293,653
367,698
Proceeds on disposal of associates
200
400
Proceeds on disposal of investments
249,771
659,177
Interest received
5,257
87
Net cash (used in)/generated from investing activities
(924,630)
371,369
Financing activities
Repayment of bank loans
(69,288)
Payment of finance leases obligations
(5,302)
(104,742)
Dividends paid
(640,952)
Net cash used in financing activities
(5,302)
(814,982)
Net increase in cash and cash equivalents
725,014
883,183
Cash and cash equivalents at beginning of year
654,494
(228,689)
Cash and cash equivalents at end of year
1,379,508
654,494
UNITED AUTOSPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information
United Autosports Limited is a private company limited by shares incorporated in England and Wales. The registered office is Rosie Road, Normanton, Wakefield, WF6 1ZB.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
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.
1.3
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.
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.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.4
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.
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:
Leasehold improvements
Over the remaining life of the lease
Plant and equipment
25% straight line
Fixtures and fittings
15% straight line
Motor vehicles
25% reducing balance
Historic cars
0% straight line
Long life assets
10% straight line
UNITED AUTOSPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
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.
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.6
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.
1.7
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.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
UNITED AUTOSPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
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.
1.8
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.
1.9
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.
UNITED AUTOSPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
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.
1.10
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.
1.11
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.
UNITED AUTOSPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.15
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.
1.16
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
UNITED AUTOSPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Marketing
11,964,791
10,017,637
Sponsorship
440,743
343,373
Sale of cars and parts
665,833
-
Sundry sales
1,448,063
1,884,871
Test days
1,258,978
1,103,040
Historic cars
380,838
282,047
Management, consultancy and commissions
2,153,562
1,838,966
Merchandise
493,064
572,887
18,805,872
16,042,821
2023
2022
£
£
Other revenue
Interest income
5,257
87
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Directors
2
2
Race staff & administration
50
45
Total
52
47
UNITED AUTOSPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
4
Employees
(Continued)
- 17 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,228,670
2,339,890
Pension costs
66,362
65,120
2,295,032
2,405,010
5
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
262,193
490,000
Company pension contributions to defined contribution schemes
30,000
30,000
292,193
520,000
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
262,193
390,000
Company pension contributions to defined contribution schemes
30,000
30,000
6
Operating loss
2023
2022
Operating loss for the year is stated after charging/(crediting):
£
£
Profit on exchange
62,431
(185)
Fees payable to the company's auditor for the audit of the company's financial statements
17,325
15,790
Depreciation of owned tangible fixed assets
925,121
948,820
(Profit)/loss on disposal of tangible fixed assets
(179,908)
137,041
Operating lease charges
191,978
193,243
UNITED AUTOSPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
5,257
87
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
9,563
2,339
Other finance costs:
Interest on finance leases and hire purchase contracts
231
3,176
Other interest
2
9,796
5,515
9
Amounts written off investments
2023
2022
£
£
Gain on disposal of fixed asset investments
249,771
659,177
10
Dividends
2023
2022
£
£
Interim paid
640,952
UNITED AUTOSPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
11
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
(655,615)
(757,533)
Adjustments in respect of prior periods
(95,581)
Total current tax
(751,196)
(757,533)
Deferred tax
Origination and reversal of timing differences
258,559
(2,941)
Total tax credit
(492,637)
(760,474)
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Loss before taxation
(111,748)
(812,064)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
(27,937)
(154,292)
Tax effect of expenses that are not deductible in determining taxable profit
4,243
4,221
Tax effect of income not taxable in determining taxable profit
(955)
Adjustments in respect of prior years
(95,581)
Research and development tax credit
(456,570)
(594,642)
Depreciation add back
186,303
206,314
Capital allowances
(298,256)
(93,890)
Deferred tax
258,559
(2,941)
Disposal of shares in associate
(62,443)
(125,244)
Taxation credit for the year
(492,637)
(760,474)
UNITED AUTOSPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
12
Tangible fixed assets
Leasehold improvements
Plant and equipment
Fixtures and fittings
Motor vehicles
Historic cars
Long life assets
Total
£
£
£
£
£
£
£
Cost
At 1 January 2023
103,575
5,393,850
798,120
84,759
544,403
6,924,707
Additions
11,173
1,138,840
36,812
57,934
228,752
1,473,511
Disposals
(249)
(449,371)
(4,644)
(35,338)
(489,602)
At 31 December 2023
114,499
6,083,319
830,288
142,693
509,065
228,752
7,908,616
Depreciation and impairment
At 1 January 2023
46,047
3,983,606
407,475
55,392
1,483
4,494,003
Depreciation charged in the year
16,134
754,611
121,023
15,756
17,597
925,121
Eliminated in respect of disposals
(370,557)
(3,817)
(1,483)
(375,857)
At 31 December 2023
62,181
4,367,660
524,681
71,148
17,597
5,043,267
Carrying amount
At 31 December 2023
52,318
1,715,659
305,607
71,545
509,065
211,155
2,865,349
At 31 December 2022
57,528
1,410,244
390,645
29,367
542,920
2,430,704
UNITED AUTOSPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
12
Tangible fixed assets
(Continued)
- 21 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Plant and equipment
7,614
295,152
13
Fixed asset investments
2023
2022
Notes
£
£
Investments in associates
14
200
Other investments
71
71
71
271
Movements in fixed asset investments
Shares in associates
Other
Total
£
£
£
Cost or valuation
At 1 January 2023
200
71
271
Disposals
(200)
-
(200)
At 31 December 2023
-
71
71
Carrying amount
At 31 December 2023
-
71
71
At 31 December 2022
200
71
271
14
Associates
Details of the company's associates at 31 December 2023 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Andretti United Extreme E Ltd
3 Rosie Road, Normanton, United Kingdom, WF6 1ZB
Ordinary shares
0
15
Stocks
2023
2022
£
£
Raw materials and consumables
560,272
304,736
UNITED AUTOSPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
16
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
1,442,203
1,066,383
Equity instruments measured at cost less impairment
71
71
Carrying amount of financial liabilities
Measured at fair value through profit or loss
Measured at amortised cost
6,324,887
3,977,562
17
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,235,231
970,822
Corporation tax recoverable
751,195
777,840
Other debtors
374,134
202,121
Prepayments and accrued income
2,293,370
1,149,949
4,653,930
3,100,732
18
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
20
456
5,302
Trade creditors
1,551,996
1,022,420
Taxation and social security
60,381
78,961
Other creditors
152,820
211,867
Accruals and deferred income
4,619,615
2,737,517
6,385,268
4,056,067
Loans due to Mr Z C Brown of £70,101 (2022 - £131,734), which are included in other creditors, are secured by a first legal charge over the assets of the company.
A first fixed charge has been deposited at Companies House in respect of all present and future obligations and liabilities due to Metro Bank Plc. Included within bank loans and overdrafts are amounts £nil (2022 - £nil) and £nil (2022 - £nil) due to Metro Bank Plc in relation to a secured term loan and bank overdraft facility respectively.
Hire purchase and finance lease liabilities of £456 (2022 - £5,302) which are included in other creditors, are secured on the related assets.
UNITED AUTOSPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
19
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
20
456
Hire purchase and finance lease liabilities of £nil (2022 - £456) which are included in other creditors, are secured on the related assets.
20
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
461
6,000
Less: future finance charges
(5)
(242)
456
5,758
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
21
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
689,885
431,326
2023
Movements in the year:
£
Liability at 1 January 2023
431,326
Charge to profit or loss
258,559
Liability at 31 December 2023
689,885
The deferred tax liability set out above is expected to reverse in more than 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
UNITED AUTOSPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
22
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
66,362
65,120
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. Pension commitments included in the balance sheet at the year end amounted to £6,597 (2022 - £6,097).
23
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
24
Reserves
Share capital represents the number of shares issued at the nominal price.
The profit and loss account represents accumulated comprehensive income for the year and prior periods, after deduction of dividends paid.
25
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
161,330
222,963
Between two and five years
161,330
161,330
384,293
26
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2023
2022
£
£
Aggregate compensation
262,193
490,000
UNITED AUTOSPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
26
Related party transactions
(Continued)
- 25 -
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Included in other debtors is £88,913 (2022 - £84,561) which relates to amounts owed from WAU Racing (PTY) Limited, a company which United Autosports Ltd owns 25% of the ordinary share capital.
During the year sales invoices totalling £142,578 (2022 - £323,864) were raised to Andretti United Extreme E Limited. This included management recharges of £nil (2022 - £200,000). The amount due from the company at the balance sheet date was £96,785 (2022 - £104,341).
During the year purchases totalling £2,668 (2022 - £2,994) were made from McLaren Racing Limited a company with a common director. The amount due to the company at the balance sheet date was £2,668 (2022 - £nil).
Sales and commissions to McLaren Racing Limited amounted to £322,900 (2022 - £178,184). The amount due from the company at the balance sheet date was £nil (2022 - £109,263).
Lease payments were made during the period to a director amounting to £75,000 (2022 - £74,400).This was in relation to a motor vehicle utilised by United Autosports Ltd.
Purchases totalling £39,066 (2022 - £31,250) were made from Official Sport Services Limited, a company controlled by the spouse of a control controlling party of United Autosports Ltd. The amount due to the company at the balance sheet date was £396 (2022 - £nil).
27
Directors' transactions
Dividends totalling £0 (2022 - £512,762) were paid in the year in respect of shares held by the company's directors.
Loans were provided (to)/from the directors during the year as follows:-
Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
R A Dean - Directors loan account
-
80,062
390,000
(387,368)
82,694
Z C Brown - Directors loan account
-
131,734
-
(61,633)
70,101
211,796
390,000
(449,001)
152,795
UNITED AUTOSPORTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
28
Cash generated from operations
2023
2022
£
£
Profit/(loss) for the year after tax
380,889
(51,590)
Adjustments for:
Taxation credited
(492,637)
(760,474)
Finance costs
9,796
5,515
Investment income
(5,257)
(87)
(Gain)/loss on disposal of tangible fixed assets
(179,908)
137,041
Depreciation and impairment of tangible fixed assets
925,121
948,820
Gain on sale of investments
(249,771)
(659,177)
Movements in working capital:
Increase in stocks
(255,536)
(283,081)
(Increase)/decrease in debtors
(1,579,843)
232,744
Increase in creditors
2,334,047
537,334
Cash generated from operations
886,730
106,545
29
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
654,494
725,014
1,379,508
Obligations under finance leases
(5,758)
5,302
(456)
648,736
730,316
1,379,052
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