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Registration number: 04066994

Malvern Tyres (Wholesale) Limited

Annual Report and Financial Statements

for the Year Ended 30 November 2023

 

Malvern Tyres (Wholesale) Limited

Contents

Company Information

1

Directors' Report

2

Strategic Report

3

Statement of Directors' Responsibilities

4

Independent Auditor's Report

5 to 7

Profit and Loss Account

8

Balance Sheet

9

Statement of Changes in Equity

10

Notes to the Financial Statements

11 to 22

 

Malvern Tyres (Wholesale) Limited

Company Information

Directors

M W Craddock

C D Freeman

A M Stenning

C M Freeman

Registered office

Malvern House
Priory Road
Gloucester
GL1 2RQ

Solicitors

Harrison Clark Rickerbys
5 Deansway
Worcester
WR1 2JG

Bankers

HSBC Bank PLC
56 Queen Street
Cardiff
CF10 2PX

Auditors

Hazlewoods LLP
Windsor House
Bayshill Road
Cheltenham
GL50 3AT

 

Malvern Tyres (Wholesale) Limited

Directors' Report for the Year Ended 30 November 2023

The directors present their report and the financial statements for the year ended 30 November 2023.

Directors of the company

The directors who held office during the year were as follows:

M W Craddock

C D Freeman

A M Stenning

C M Freeman

Financial instruments

The company does not actively use financial instruments as part of its financial risk management. It is exposed to the usual credit risk and cash flow risk associated with selling on credit and manages this through credit control procedures. The nature of its financial instruments means that they are subject to liquidity and price risk as detailed in note 17 to these financial statements.

The company has considerable financial resources available and continues to trade profitably generating cash from operating activities. The directors have prepared forecasts for the next 12 months that indicate that these trends will continue. The directors therefore have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future and have continued to adopt the going concern basis in preparing the financial statements.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

Reappointment of auditors

Hazlewoods LLP have expressed their willingness to continue in office.

Approved by the Board on 29 August 2024 and signed on its behalf by:


C D Freeman
Director

 

Malvern Tyres (Wholesale) Limited

Strategic Report for the Year Ended 30 November 2023

The directors present their strategic report for the year ended 30 November 2023.

Principal activity

The principal activity of the company is the wholesale and retail of tyres and exhausts.

Fair review of the business

The results for the year, which are set out in the profit and loss account, show turnover for the year of £28,457,982 (2022 - £28,462,594) and a pre tax profit of £1,094,806 (2022 - £1,101,005). During the year, dividends of £546,997 (2022 - £432,800) were paid.

The company has fixed assets including investments, goodwill, freehold and leasehold property, plant and machinery and fixtures and fittings valued in the financial statements at net book value amounting to £8,499,883 (2022 - £8,322,677) and net assets of £5,203,460 (2022 - £4,943,394). The financial position at the year end is considered to be satisfactory.

The company has continued to improve its performance year on year in FY23 with profit numbers growing significantly, as a result of a great team effort in a market that has showed signs of more stability.

Under the new leadership of Chris Freeman, new methods of stock management, logistics and purchasing have been employed to great effect. As a result, the company is now in a better position to supply the trade market and motorists with a wider range of products.

Market conditions continue to be challenging, however as a result of the steps taken in the year and the continuing development of the management team, the company is well placed to continue its progress.
 

Given the nature of the business, the company's directors are of the opinion that key performance indicators are important. The company uses a number of indicators to monitor and improve development, performance or the position of the business. Indicators are reviewed and altered to meet changes both in the internal and external environments.

Future developments

The external environment is expected to remain competitive going forwards; however, the directors remain confident that the company will continue to improve its current level of performance in the future and will continue to trade as a going concern.

Principal risks and uncertainties

The management of the business and the execution of the company's strategy are subject to a number of risks. The key business risks and uncertainties affecting the company are considered to relate to competition from both national and local providers of tyres and exhausts.

Approved by the Board on 29 August 2024 and signed on its behalf by:


C D Freeman
Director

 

Malvern Tyres (Wholesale) Limited

Statement of Directors' Responsibilities

The directors are responsible for preparing the Directors' Report, Strategic 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 apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards has been followed, subject to any material departures disclosed and explained in the financial statements; and

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.

 

Malvern Tyres (Wholesale) Limited

Independent Auditor's Report to the Members of Malvern Tyres (Wholesale) Limited

Opinion

We have audited the financial statements of Malvern Tyres (Wholesale) Limited (the 'company') for the year ended 30 November 2023, which comprise the Profit and Loss Account, Balance Sheet, Statement of Changes in Equity, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

give a true and fair view of the state of the company's affairs as at 30 November 2023 and of its profit for the year then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor 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 original financial statements were 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.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

 

Malvern Tyres (Wholesale) Limited

Independent Auditor's Report to the Members of Malvern Tyres (Wholesale) Limited

Opinion on other matter prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our 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 and the Directors' Report.

We have nothing to report in respect of the following matters where 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 directors' 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 Statement of Directors' Responsibilities set out on page 4, 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 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.

Extent to which the audit was 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, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We considered the nature of the company’s industry and its control environment and reviewed the company’s documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management about their own identification and assessment of the risks of irregularities.

We obtained an understanding of the legal and regulatory framework that the company operates in and identified the key laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements, including the UK Companies Act and tax legislation, and, those that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty.

We discussed among the audit engagement team regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.

 

Malvern Tyres (Wholesale) Limited

Independent Auditor's Report to the Members of Malvern Tyres (Wholesale) Limited

In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgments made in accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.

In addition to the above, our procedures to respond to the risks identified included the following:

reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatements due to fraud;.

enquiring of management concerning actual and potential litigation and claims and instances of non-compliance with laws and regulations; and

reading minutes of meetings of those charged with governance.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 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.





Simon Worsley (Senior Statutory Auditor)
For and on behalf of Hazlewoods LLP, Statutory Auditor

Windsor House
Bayshill Road
Cheltenham
GL50 3AT

29 August 2024

 

Malvern Tyres (Wholesale) Limited

Profit and Loss Account for the Year Ended 30 November 2023

Note

2023
 £

2022
 £

Turnover

3

28,457,982

28,462,594

Cost of sales

 

(18,150,926)

(19,394,230)

Gross profit

 

10,307,056

9,068,364

Administrative expenses

 

(9,005,053)

(7,880,920)

Other operating income

4

5,808

31,921

Operating profit

5

1,307,811

1,219,365

Other interest receivable and similar income

6

5,400

2,019

Interest payable and similar charges

7

(218,405)

(120,379)

Profit before tax

 

1,094,806

1,101,005

Taxation

10

(287,743)

(206,868)

Profit for the financial year

 

807,063

894,137

The above results were derived from continuing operations.

The company has no other comprehensive income for the year.

 

Malvern Tyres (Wholesale) Limited

(Registration number: 04066994)
Balance Sheet as at 30 November 2023

Note

2023
 £

2022
 £

Fixed assets

 

Intangible assets

11

1,318

5,116

Tangible assets

12

8,495,230

8,314,226

Investments

13

3,335

3,335

 

8,499,883

8,322,677

Current assets

 

Stocks

14

8,141,436

7,379,903

Debtors

15

3,081,028

3,230,352

Cash at bank and in hand

 

187,348

603,493

 

11,409,812

11,213,748

Creditors: Amounts falling due within one year

16

(11,074,250)

(10,853,590)

Net current assets

 

335,562

360,158

Total assets less current liabilities

 

8,835,445

8,682,835

Creditors: Amounts falling due after more than one year

16

(3,380,676)

(3,541,970)

Provisions for liabilities

10

(251,309)

(197,471)

Net assets

 

5,203,460

4,943,394

Capital and reserves

 

Called up share capital

19

55,800

55,800

Share premium reserve

12,600

12,600

Capital redemption reserve

104,200

104,200

Profit and loss account

5,030,860

4,770,794

Total equity

 

5,203,460

4,943,394

Approved and authorised by the Board on 29 August 2024 and signed on its behalf by:
 


C D Freeman
Director

 

Malvern Tyres (Wholesale) Limited

Statement of Changes in Equity for the Year Ended 30 November 2023

Share capital
£

Share premium
£

Capital redemption reserve
£

Profit and loss account
£

Total
£

At 1 December 2022

55,800

12,600

104,200

4,770,794

4,943,394

Profit for the year

-

-

-

807,063

807,063

Dividends

-

-

-

(546,997)

(546,997)

At 30 November 2023

55,800

12,600

104,200

5,030,860

5,203,460

Share capital
£

Share premium
£

Capital redemption reserve
£

Profit and loss account
£

Total
£

At 1 December 2021

55,800

12,600

104,200

4,309,457

4,482,057

Profit for the year

-

-

-

894,137

894,137

Dividends

-

-

-

(432,800)

(432,800)

At 30 November 2022

55,800

12,600

104,200

4,770,794

4,943,394

 

Malvern Tyres (Wholesale) Limited

Notes to the Financial Statements for the Year Ended 30 November 2023

 

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
Malvern House
Priory Road
Gloucester
GL1 2RQ

 

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 - 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006.

Basis of preparation

These financial statements have been prepared using the historical cost convention except for, where disclosed in these accounting policies, certain items that are shown at fair value.

The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the company operates. Monetary amounts in these financial statements are rounded to the nearest Pound.

Exemption from preparing a cash flow statement

The company has not presented a cash flow statement on the grounds that the company is a wholly owned subsidiary and a group cash flow statement is included in the financial statements of the parent company.

Name of parent of group

These financial statements are consolidated in the financial statements of Malvern Tyre Holdings Limited.

The financial statements of Malvern Tyre Holdings Limited may be obtained from Companies House.

Group accounts not prepared

The company has taken advantage of the exemption from the requirement to prepare consolidated financial statements on the basis that it is a wholly-owned subsidiary and is included in the consolidated accounts of its parent, as set out in section 400(1) of the Companies Act 2006

Going concern

After reviewing the company's forecasts and projections, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

Judgements and estimation uncertainty

These financial statements do not contain any significant judgements or estimation uncertainty.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the company. The company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the company's activities.

 

Malvern Tyres (Wholesale) Limited

Notes to the Financial Statements for the Year Ended 30 November 2023

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional current rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the initial transaction dates.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Tax

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

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

Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the company. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Freehold buildings

Nil

Leasehold property

Over the period of the lease

Plant and machinery

5% - 33% straight line

Motor vehicles

20% straight line

No depreciation is provided on freehold properties as it is the company's policy to maintain these assets so that they keep their previously assessed standard of performance. As the useful economic lives of these assets are of such length and the residual values are such that they are not materially different from the carrying amount any depreciation would not be material.

No depreciation is provided in respect of freehold land.

Intangible assets

Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the company’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date.

Negative goodwill arising on an acquisition is recognised on the face of the balance sheet on the acquisition date and subsequently the excess up to the fair value of non-monetary assets acquired is recognised in profit or loss in the periods in which the non-monetary assets are recovered.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

 

Malvern Tyres (Wholesale) Limited

Notes to the Financial Statements for the Year Ended 30 November 2023

Asset class

Amortisation method and rate

Goodwill

Straight line over 20 years

Goodwill

A policy of 20 years for amortising the goodwill has been retained following the transition to FRS 102 in 2016. Whilst FRS 102 recommends a default maximum economic life for goodwill of 10 years, the directors’ consider that there was no revision required to the existing policy of 20 years and that there is an active and sustainable market for the asset that supports a longer period being used.

Investments

Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. All trade debtors are repayable within one year and hence are included at the undiscounted cost of cash expected to be received. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the debtors.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the weighted average cost method (WAVCO)

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and all are repayable within one year and hence are included at the undiscounted amount of cash expected to be paid.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

 

Malvern Tyres (Wholesale) Limited

Notes to the Financial Statements for the Year Ended 30 November 2023

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Financial instruments

Classification
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability of the company is presented as a liability on the balance sheet. The corresponding dividends relating to the liability component are charged as interest expenses in the profit and loss account.

 Recognition and measurement
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

 

Malvern Tyres (Wholesale) Limited

Notes to the Financial Statements for the Year Ended 30 November 2023

Financial instruments (continued)

Impairment
Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss as described below.

A non financial asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

The recoverable amount of goodwill is derived from measurement of the present value of the future cash flows of the cash-generating units ('CGUs') of which the goodwill is a part. Any impairment loss in respect of a CGU is allocated first to the goodwill attached to that CGU, and then to other assets within that CGU on a pro-rata basis.

Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised. Where a reversal of impairment occurs in respect of a CGU, the reversal is applied first to the assets (other than goodwill) of the CGU on a pro-rata basis and then to any goodwill allocated to that CGU.

For financial assets carried at amortised cost, the amount of an impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.

Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

 

3

Turnover

The total turnover of the company has been derived from its principal activity wholly undertaken in the United Kingdom.

 

4

Other operating income

The analysis of the company's other operating income for the year is as follows:

2023
£

2022
£

Rent receivable

5,808

31,921

 

5

Operating profit

Arrived at after charging:

2023
 £

2022
 £

Depreciation expense

238,334

224,686

Amortisation expense

3,798

7,988

Operating lease expense - property

641,950

629,834

Operating lease expense - plant and machinery

2,903

4,424

Loss on disposal of tangible fixed assets

5,523

-

 

Malvern Tyres (Wholesale) Limited

Notes to the Financial Statements for the Year Ended 30 November 2023

 

6

Other interest receivable and similar income

2023
£

2022
£

Interest income on investments

5,400

2,019

 

7

Interest payable and similar charges

2023
£

2022
£

Interest on bank overdrafts and borrowings

101,987

65,885

Interest on obligations under finance leases and hire purchase contracts

6,712

6,351

Interest expense on other finance liabilities

109,706

48,143

218,405

120,379

 

8

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2023
£

2022
£

Wages and salaries

5,009,145

4,437,565

Social security costs

406,583

362,054

Pension costs, defined contribution scheme

81,178

73,507

5,496,906

4,873,126

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

2023
 No.

2022
 No.

Production

189

184

Administration and support

18

9

207

193

 

9

Auditors' remuneration

2023
 £

2022
 £

Audit of the financial statements

12,250

12,250

Other fees to auditors

Taxation compliance services

1,750

1,750

All other non-audit services

3,750

3,750

5,500

5,500

 

Malvern Tyres (Wholesale) Limited

Notes to the Financial Statements for the Year Ended 30 November 2023

 

10

Taxation

Tax charged/(credited) in the profit and loss account

2023
£

2022
£

Current taxation

UK corporation tax

227,126

196,242

UK corporation tax adjustment to prior periods

6,779

-

233,905

196,242

Deferred taxation

Arising from origination and reversal of timing differences

53,838

10,626

Tax expense in the income statement

287,743

206,868

The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2022 - lower than the standard rate of corporation tax in the UK) of 23.01% (2022 - 19%).

The differences are reconciled below:

2023
£

2022
£

Profit before tax

1,094,806

1,101,005

Corporation tax at standard rate

251,915

209,191

Effect of expense not deductible in determining taxable profit (tax loss)

24,814

9,455

Deferred tax expense/(credit) relating to changes in tax rates or laws

4,235

(7,619)

Increase in UK and foreign current tax from unrecognised temporary difference from a prior period

6,779

-

Tax decrease from effect of capital allowances and depreciation

-

(4,159)

Total tax charge

287,743

206,868

Deferred tax

Deferred tax assets and liabilities

2023

Liability
£

Accelerated tax depreciation

260,020

Short term timing differences

(8,711)

251,309

2022

Liability
£

Accelerated tax depreciation

199,005

Short term timing differences

(1,534)

197,471

 

Malvern Tyres (Wholesale) Limited

Notes to the Financial Statements for the Year Ended 30 November 2023

 

11

Intangible assets

Goodwill
 £

Cost

At 1 December 2022 and at 30 November 2023

602,108

Amortisation

At 1 December 2022

596,992

Amortisation charge

3,798

At 30 November 2023

600,790

Carrying amount

At 30 November 2023

1,318

At 30 November 2022

5,116

 

12

Tangible assets

Land and buildings
£

Furniture, fittings and equipment
 £

Motor vehicles
 £

Total
£

Cost

At 1 December 2022

7,295,284

3,909,290

363,257

11,567,831

Additions

960

221,764

216,973

439,697

Disposals

-

-

(29,845)

(29,845)

At 30 November 2023

7,296,244

4,131,054

550,385

11,977,683

Depreciation

At 1 December 2022

113,235

2,855,929

284,441

3,253,605

Charge for the year

4,431

116,257

117,646

238,334

Eliminated on disposal

-

-

(9,486)

(9,486)

At 30 November 2023

117,666

2,972,186

392,601

3,482,453

Carrying amount

At 30 November 2023

7,178,578

1,158,868

157,784

8,495,230

At 30 November 2022

7,182,049

1,053,361

78,816

8,314,226

Included within the net book value of tangible fixed assets is £227,444 (2022 - £131,303) in respect of assets held under finance leases and similar hire purchase contracts. Depreciation for the year on these assets was £49,585 (2022 - £39,843).

Included within the net book value of land and buildings above is £7,089,201 (2022 - £7,088,241) in respect of freehold land and buildings and £89,377 (2022 - £93,808) in respect of long leasehold land and buildings.

 

Malvern Tyres (Wholesale) Limited

Notes to the Financial Statements for the Year Ended 30 November 2023

 

13

Investments in subsidiaries, joint ventures and associates

2023
£

2022
£

Investments in subsidiaries

3,335

3,335

Subsidiaries

£

Cost and carrying value

At 1 December 2022 and at 30 November 2023

3,335

Details of undertakings

Details of the investments in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking

Registered office

Holding

Proportion of voting rights and shares held

     

2023

2022

Subsidiary undertakings

Malvern Tyres Limited

Ordinary

100%

100%

 

England and Wales

     

Auto Tyre and Battery Co Limited

Ordinary

100%

100%

 

England and Wales

     

Associates

B B Tyres Limited

Ordinary

25%

25%

 

England and Wales

     

The principal activity of B B Tyres Limited is the wholesale and retail of tyres and exhausts. The principal activity of both subsidiaries is that of dormant companies.

 

14

Stocks

2023
 £

2022
 £

Goods for resale

8,141,436

7,379,903

 

15

Debtors

2023
 £

2022
 £

Trade debtors

1,800,649

2,006,772

Other debtors

160,933

156,051

Prepayments

160,452

145,829

Amounts owed by group undertakings

958,994

921,700

 

3,081,028

3,230,352

 

Malvern Tyres (Wholesale) Limited

Notes to the Financial Statements for the Year Ended 30 November 2023

 

16

Creditors

Note

2023
 £

2022
 £

Due within one year

 

Loans and borrowings

17

330,999

514,980

Trade creditors

 

6,674,377

7,326,692

Amounts owed to group undertakings

 

1,344,729

200,018

Social security and other taxes

 

471,762

608,023

Outstanding defined contribution pension costs

 

16,610

14,374

Other creditors

 

1,785,194

1,820,005

Accrued expenses

 

24,030

17,530

Corporation tax liability

 

426,549

351,968

 

11,074,250

10,853,590

Due after one year

 

Loans and borrowings

17

1,053,982

1,207,707

Amounts owed to group undertakings

 

2,326,694

2,334,263

 

3,380,676

3,541,970

The amounts owed under invoice discounting arrangements (included within other creditors above) are secured against the company's trade debtors.

 

17

Loans and borrowings

2023
£

2022
£

Current loans and borrowings

Bank borrowings

246,680

454,375

HP and finance lease liabilities

84,319

60,605

330,999

514,980

2023
£

2022
£

Non-current loans and borrowings

Bank borrowings

925,910

1,130,542

HP and finance lease liabilities

128,072

77,165

1,053,982

1,207,707

Included in the loans and borrowings are the following amounts due after more than five years:

2023
 £

2022
 £

Bank loans due after more than five years by instalments

344,659

399,562

 

Malvern Tyres (Wholesale) Limited

Notes to the Financial Statements for the Year Ended 30 November 2023

Bank loans and overdrafts are secured by fixed charges over all the company's freehold properties and some of its plant and machinery and stock, together with a cross guarantee with fellow subsidiaries.

Included within bank loans are long term loans. The repayment terms on these loans range up to October 2030 with interest rates between 2.45% and 3.65% above the Bank of England base rate.

The finance leases are secured against the assets to which they relate.

 

18

Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £81,178 (2022 - £73,507).Contributions totalling £16,610 (2022 - £14,374) were payable to the scheme at the end of the year and are included in creditors.

 

19

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary shares of £1 each

55,800

55,800

55,800

55,800

         
 

20

Obligations under leases and hire purchase contracts

Finance leases

The total of future minimum lease payments is as follows:

2023
 £

2022
 £

Not later than one year

84,319

60,605

Later than one year and not later than five years

128,072

77,165

212,391

137,770

Operating leases

The total of future minimum lease payments is as follows:

2023
£

2022
£

Not later than one year

502,309

525,251

Later than one year and not later than five years

1,453,838

1,552,159

Later than five years

302,624

585,121

2,258,771

2,662,531

 

21

Related party transactions

During the year the company made the following related party transactions:

M W Craddock
(non-executive director)
During the year, the company paid fees of £2,500 (2022 - £30,000) for the services of M W Craddock on an arms' length basis.

 

Malvern Tyres (Wholesale) Limited

Notes to the Financial Statements for the Year Ended 30 November 2023

 

22

Parent and ultimate parent undertaking

The company's immediate parent is Malvern Tyres Holdings Limited, incorporated in England and Wales. The ultimate controlling party is C M Freeman.