Company registration number:
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COMPANY INFORMATION
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CONTENTS
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STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
Now in its 60th year of trading, 2023 proved more challenging for the Company, with easing new car supply resulting in increased targets and reduced new car margins, and inflationary pressures increasing administrative expenses.
Overall turnover increased 2% (£553k) in 2023, largely attributable to a £2.2m increase in car sales, offset by a £1.8m decrease in fuel sales.
Overall, new car volumes were very similar to the previous year, but this disguises the fact that new car sales were up 56% in the first quarter and then 28% down in the second quarter. Supply-side issues continued to affect Honda during the first half of 2023, with Jazz and Civic being worst affected.
There were several new models launched during the year, including the FL5 generation Civic Type R, the all new ZR-V e:HEV, the 6th generation CR-V in both e:HEV and e:PHEV variants, and the e:Ny1 BEV. This represents a significant expansion of the model range, and undoubtedly gives the Company its best-ever model range. As with most manufacturers, post-pandemic, all these new models were priced significantly above the comparable outgoing model. This is in part because of increased size and quality, but also reflective of the cost of the high voltage batteries now included in all models. This has caused affordability issues for some customers with a consequential pressure on margins. With so many new models, targets were raised and intense competition ensued, resulting in new car margins dropping from 9% in 2022 to 7.2% this year. The new car supply problems caused an increased demand for used cars. Despite a general market shortage for used cars, the directors managed to maintain healthy stocks. As a result, our used car sales increased by 24% over the year, with margins increasing slightly to 7%. Our Used:New ratio increased from 1.5:1 to 1.7:1. In Aftersales, a 5% reduction in attended hours and a 1.6% increase in our sold hours resulted in increased overall efficiency of 107%, up from 100% in 2022, and an 18% increase in department profitability. Our Shell filling station saw a 9% drop in fuel volumes which, after the 30% uplift last year, was disappointing but not entirely unexpected. Coupled with falling fuel prices, our fuel turnover was 18% down. Our shop sales dropped by 12%, which we attribute both to the drop in fuel volumes and the opening of a Little Waitrose in the Shell filling station opposite. In response to this increased competition, the directors refurbished the shop and changed its wholesale supplier from Booker to Nisa from October 2023. It was felt by the directors that Nisa, owned by Co-op and supplying Co-op products, would provide a value proposition to contrast with Little Waitrose. This appears to have been very successful. In response to the inflationary pressures and in line with motor industry trends, the directors made the decision to increase salaries and wages. This had the benefit of retaining staff and protecting our recruitment costs, but resulted in a 7% increase in related costs. During the pandemic, the directors had taken the decision to pause contributions into their pension scheme. These resumed in 2023, along with a lump sum payment being made at the end of the year to catch back some of the shortfall. The Company’s energy costs increased by 26% and, as a result, the directors decided to fix rates in April 2024. The directors also installed an 8kW solar generation system to further reduce costs. The directors replaced the Company’s on-premises servers in 2023, with a significantly enhanced level of support and backup. This resulted in a 21% increase in our computer costs. These capital projects resulted in a 57% increase in our plant and machinery depreciation but, having completed its programme of site improvements over a number of years, we were able to reduce our repairs and maintenance by 25%. During the pandemic and the resulting supply-side disruptions, Honda had relaxed their demonstrator requirements for dealers. This came to an end in 2023, resulting in a 14% increase in vehicle running costs. Legal costs increased by 133%, largely due to a staff disciplinary matter which was successfully concluded during the year with a signed settlement agreement.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Insurance costs increased by 12%, despite an excellent claims record. This was in part due to the introduction of a cyber insurance policy. The directors took the decision to replace our auditors at the beginning of 2023 and this has resulted in audit costs increasing by 23%. Overall administrative expenses increased by 12% in 2023, which along with the more challenging trading conditions, resulted in Company profit reducing by 31%.
Honda Agency
From April 2024, Honda began supplying the Honda e:Ny1 BEV (Battery Electric Vehicle) model through their new Agency model. Being a BEV, the e:Ny1 was impacted by the UK government’s ZEV mandate, which requires manufacturers to sell up to 22% of zero emission vehicles. In turn, this resulted in intense competition, with large discounts being offered by both manufactures and dealers. Such a significant change was always going to provide challenges and the directors are confident that Honda will resolve these issues in due course. Honda targets In the last quarter of 2023 and the first quarter of 2024, the Company was given new car targets which the directors consider to have been unachievable. This resulted in a loss of target-related earnings in both quarters. This has never happened previously and our targets for the remainder of 2024 are once again within reach. The directors are optimistic that this was an isolated occurrence; nevertheless it has shown this to be a significant risk. The strength of a motor dealership is that it is not reliant on any one area and, on this occasion, our used car, servicing, parts and forecourt operations were able to sustain our business. Risk of fire Another significant risk for fuel retailers and motor dealerships is that of fire. At the end of 2021, the Company changed its fire alarm maintenance company, which resulted in a thorough review of the system and many improvements being made. Crucially, the system is now monitored, ensuring there will be no delay in the Fire Brigade being called in the event of a fire. Electric and hybrid vehicles risk There is a risk of electrocution and fire from working on the lithium-ion batteries in today’s BEVs (battery electric vehicles). Our technicians have been trained by Honda to work safely on both BEV and HEV (hybrid electric vehicles). Additional safety equipment has been purchased, including a suitable fire extinguisher, vehicle fire blanket and safety rescue hook. An AED defibrillator is available behind our reception. A policy has been introduced for handling BEVs with damaged batteries. Risk of cyber attack Multi-factor authentication has been implemented for all remote access to our CRM database, as well as to our Microsoft 365 email and office systems. Our new on-premises servers, as well as our hosted webserver, are fully managed, with security updates being promptly applied. Our PCs are centrally managed, hold no data and receive automatic virus and operating system updates. The Company’s systems are being monitored by the National Cyber Security Centre’s Early Warning system. The directors have now taken on a cyber insurance policy, and continue to review where security improvements may be made.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
FCA Discretionary Commission
On 11 January 2024 the Financial Conduct Authority (FCA) made an announcement concerning customer complaints involving motor finance agreements, where a discretionary commission was paid to motor dealers between 6 April 2007 and 27 January 2021. The major part of the risk would appear to rest with the finance house rather than with the dealer. In any case, the directors have always opted for a low APR rate to facilitate sales. For these reasons, the directors believe there to be a low risk to our business. FCA GAP Insurance The FCA has banned the sale of GAP policies from some providers, with most other providers choosing to withdraw their policies. As a result, we are currently unable to offer GAP policies to our customers. The directors believe that the Honda GAP product was reasonably priced and offered good value for money, and as such that there is a low risk to the business. The Company has managed to make up the loss of GAP by concentrating on other products. ElectricBrands in administration It is with disappointment that the directors have to report that ElectricBrands has entered administration. The directors had taken on the XBUS and Evetta agency agreements, with the intention of operating them from our Old Forge satellite site in Ottershaw.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Future Developments
New models Honda has been unusually quiet about upcoming models, although the directors are expecting a replacement Jazz in 2025. A concept Prelude was revealed in 2024 which the directors hope may also reach showrooms in 2025. Honda has joint ventures with both Sony and Nissan and has now unveiled the Honda 0 Series, an ambitious new EV series which Honda intends launching globally from 2026. The Honda 0 Series will include a dramatically styled flagship saloon, as well as a futuristic ‘Space Hub’. Please visit 0.honda for more information. Nisa Express The directors are pleased to report that changing to Nisa for its wholesale supply, along with a substantial effort to improve our shop operation, has dramatically increased our shop sales and gross profit. As a result of this success, the directors decided to rebrand its forecourt shop as Nisa Express, which was completed in June 2024. July saw a £52k increase in year-to-date shop gross profit, compared with the same period in 2023, which annualises to an additional £89k for 2024. The directors believe this to be an underestimate, as our shop gross profits are steadily increasing month by month. There was a £28k increase in the three months to July 2024 and this suggests that the business may have increased its shop earning potential by over £100k pa. Solar power generation During 2024, the directors doubled the size of our solar generation system. Our Ottershaw premises benefits from a large roof area, and the directors have now drawn up plans for a further expansion of capacity. New territory areas The directors recognise that there is huge potential in its recently enlarged territory, which now extends into Camberley, Ascot and Bracknell, and is focusing on unlocking that potential.
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The directors who served during the year were:
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙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 to 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.
The profit for the year, after taxation, amounted to £404,840 (2022 - £608,978).
The Group has chosen, in accordance with Section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013, to set out within the Group's Strategic Report, the Group's Strategic Report Information as required by Schedule 7 of the Large and Medium Sized Companies and Groups (Accounts and Reports) Regulation 2008. This includes information that would have been included within future developments.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
There have been no significant events affecting the Company since the year end.
Under section 485 (2) of the Companies Act 2006, Menzies LLP will be deemed to have been reappointed as auditor 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TRIDENT GARAGES LIMITED
We have audited the financial statements of Trident Garages Limited (the 'Company') for the year ended 31 December 2023, which comprise the Income Statement, the Statement of Financial Position, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
The Company has not accounted for the pension, assets, and liabilities of the defined benefit pension scheme in accordance with FRS 102 Section 28 Employee Benefits. The pension costs have instead been accounted for as a defined contribution scheme, with no pension asset or liability recognised. The financial statements also do not include the relevant disclosures required by FRS 102 for a defined benefit pension scheme. As explained in Note 21, the last draft actuarial valuation for the pension scheme was carried out on 5 April 2023 by a qualified independent actuary, who identified that the scheme had a net surplus of £179,000. This valuation was carried out for funding purposes rather than on the basis required by FRS 102. In the absence of an actuarial valuation at the year-end, we were unable to quantify the financial effect of the Company not accounting for the defined benefit pension scheme in accordance with FRS 102.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.
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.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TRIDENT GARAGES LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of the 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.
Except for the matter described in the basis for qualified opinion section of our report, 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.
Arising solely from the limitation on the scope of our work relating to the defined benefit pension scheme, referred to above:
∙we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and
∙we were unable to determine whether adequate accounting records have been kept.
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:
∙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.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TRIDENT GARAGES LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant including:
∙The Companies Act 2006;
∙Financial Reporting Standard 102; and
∙General Data Protection Regulations.
We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
We understood how the Company are complying with those legal and regulatory frameworks by making inquiries to management and those responsible for legal and compliance procedures. We corroborated our inquiries through our review of board minutes. The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The assessment did not identify any issues in this area. We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:
∙Identifying and assessing the design effectiveness of controls that management has in place to prevent and detect fraud;
∙Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
∙Challenging assumptions and judgements made by management in its significant accounting estimates; and
∙Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas:
∙Posting of journals to the accounting software which are of a non-routine nature in terms of timing and amount;
∙timing of revenue recognition;
∙the use of management override of controls to manipulate results.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TRIDENT GARAGES LIMITED (CONTINUED)
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditor
1st Floor
Midas House
62 Goldsworth Road
Surrey
GU21 6LQ
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INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
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STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 30 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
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STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
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ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Trident Garages Limited is a private company, limited by shares, incorporated in the United Kingdom under the Companies Act 2006, and registered in England and Wales. The registered office and principle place of activity can be found on the Company Information page.
The presentation currency of the financial statements is Pound Sterling (£). The principal activity of the company in the year under review was that of garage proprietors.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The directors have considered current trading together with available facilities and headroom and are confident that the company will be able to meet its debts as they fall due for the period of 12 months after the approval of these financial statements. Accordingly, the financial statements have been prepared on a going concern basis.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Honda retains title of the cars until sale to a third-party customer, which triggers transfer of the title to Trident Garages. Therefore, Trident Garages does not bear the substantial risks and rewards of ownership and so the consignment stock and corresponding creditor are not recognised in the financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
The directors do not consider there to be any judgements or estimation uncertainty which materially impact these financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
11.Taxation (continued)
There were no factors that may affect future tax charges.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Share premium account
Revaluation reserve
Capital redemption reserve
Profit and loss account
The company operates a defined benefit pension scheme in the UK named "Motor Industry Pension Plan Trident Garages Limited", the assets of which are funded separately from the company.
The company has not complied wtih FRS 102, section 28 Employee benefits, which requires that the scheme asset or liability be recognised in the Financial Statements for the year ended 31 December 2023. Noted below are some details in respect of the scheme. The last draft actuarial valuation was carried out at 5 April 2023, by a qualified independent actuary, which identified that the scheme had a net surplus of £122,000. As of December 2023 company contributions are 23.1% (2022: 34.5%) of pensionable pay on the basis that this amount is adequate for the purpose of securing the Statutory Funding Objective. The scheme is closed to new members and so under the projected unit method, the current service cost would be expected to increase over time as members of the scheme approach retirement. No asset or liability has been included in the financial statements in respect of the defined benefit pension scheme obligations. The company also operates a defined contributions pension scheme, of which 3 directors are accruing benefits under. The assets of the scheme are held seperately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £148,231 (2022: £115,716). Amounts due to be paid to the fund at the year end are £Nil.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
There was no individual ultimate controlling party during the year under review or the preceding year.
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