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Registration number: 11065805



Innovation Automotive Ltd

Annual Report and Unaudited Financial Statements

for the Year Ended 31 December 2023

 

Innovation Automotive Ltd

Contents

Company Information

1

Balance Sheet

2

Notes to the Unaudited Financial Statements

3 to 9

 

Innovation Automotive Ltd

Company Information

Director

S Hmicho

Registered office

First Floor
Unit 101-102 Cirencester Business Park
Love Lane
Cirencester
GL7 1XD

Bankers

Virgin Money
154-158 Kensington High Street
London
W8 7RL

Accountants

Hazlewoods LLP
Staverton Court
Staverton
Cheltenham
GL51 0UX

 

Innovation Automotive Ltd

(Registration number: 11065805)
Balance Sheet as at 31 December 2023

Note

2023
£

2022
£

Fixed assets

 

Intangible assets

5

96,955

124,274

Tangible assets

6

30,329

32,090

 

127,284

156,364

Current assets

 

Stocks

7

3,026,423

1,979,625

Debtors

8

353,685

151,609

Cash at bank and in hand

 

115,619

398,701

 

3,495,727

2,529,935

Creditors: Amounts falling due within one year

9

(7,473,702)

(3,900,209)

Net current liabilities

 

(3,977,975)

(1,370,274)

Total assets less current liabilities

 

(3,850,691)

(1,213,910)

Creditors: Amounts falling due after more than one year

9

(350,489)

(344,499)

Provisions

 

(77,955)

-

Net liabilities

 

(4,279,135)

(1,558,409)

Capital and reserves

 

Called up share capital

900,000

900,000

Profit and loss account

(5,179,135)

(2,458,409)

Shareholders' deficit

 

(4,279,135)

(1,558,409)

For the financial year ending 31 December 2023 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

Director's responsibilities:

The members have not required the company to obtain an audit of its accounts for the year in question in accordance with section 476; and

The director acknowledges his responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.

These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.

These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime and the option not to file the Profit and Loss Account has been taken.

Approved and authorised by the director on 12 September 2024
 


S Hmicho
Director

 

Innovation Automotive Ltd

Notes to the Unaudited Financial Statements for the Year Ended 31 December 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:
First Floor
Unit 101-102 Cirencester Business Park
Love Lane
Cirencester
GL7 1XD

 

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 Section 1A smaller entities - 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' and the Companies Act 2006 (as applicable to companies subject to the small companies' regime).

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.

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.

Critical accounting 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 amounts 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
 

Judgements

No significant judgements have been made by management in preparing these financial statements.

Key sources of estimation uncertainty

No key sources of estimation uncertainty have been identified by management in preparing these financial statements other than those detailed in these accounting policies.

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.

 

Innovation Automotive Ltd

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2023

Government grants

Government grants are recognised based on the accrual model and are measured at the fair value of the asset received or receivable. Grants are classified as relating either to revenue or to assets. Grants relating to revenue are recognised in income over the period in which the related costs are recognised. Grants relating to assets are recognised over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income.

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency 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 taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in the statement of comprehensive income, except to the extent that it relates to items recognised in other comprehensive income or directly in capital and reserves. In this case, tax is recognised in other comprehensive income or directly in capital and reserves, respectively.

Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.

Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.

Tangible assets

Tangible assets are stated in the statement of financial position 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, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Fixtures, fittings and equipment

25% straight line

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:

Asset class

Amortisation method and rate

Branding and website

20% straight line

 

Innovation Automotive Ltd

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2023

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 first-in, first-out method.

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.

Provisions

Provisions are recognised when the company has an obligation at the reporting date as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

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.

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.

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.

 

Innovation Automotive Ltd

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2023

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.

 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.

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

Staff numbers

The average number of persons employed by the company (including the director) during the year, was 11 (2022 - 10).

 

Innovation Automotive Ltd

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2023

 

4

Loss before tax

Arrived at after charging:

2023
 £

2022
 £

Depreciation expense

11,126

8,182

Amortisation expense

27,319

10,720

 

5

Intangible assets

Brands and web domain
£

Cost

At 1 January 2023

136,594

At 31 December 2023

136,594

Amortisation

At 1 January 2023

12,320

Amortisation charge

27,319

At 31 December 2023

39,639

Carrying amount

At 31 December 2023

96,955

At 31 December 2022

124,274

 

6

Tangible assets

Furniture, fittings and equipment
 £

Cost

At 1 January 2023

48,071

Additions

9,365

At 31 December 2023

57,436

Depreciation

At 1 January 2023

15,981

Charge for the year

11,126

At 31 December 2023

27,107

Carrying amount

At 31 December 2023

30,329

At 31 December 2022

32,090

 

7

Stocks

2023
£

2022
£

Stock for resale

3,026,423

1,979,625

 

Innovation Automotive Ltd

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2023

 

8

Debtors

2023
 £

2022
 £

Trade debtors

67,678

22,900

Other debtors

246,208

27,903

Prepayments

39,799

100,806

 

353,685

151,609

 

9

Creditors

Note

2023
 £

2022
 £

Due within one year

 

Loans and borrowings

10

1,161,538

1,015,328

Trade creditors

 

6,029,738

2,810,174

Social security and other taxes

 

172,166

7,340

Outstanding defined contribution pension costs

 

10,489

7,897

Other creditors

 

86,621

36,329

Accrued expenses

 

13,150

23,141

 

7,473,702

3,900,209

Note

2023
£

2022
£

Due after one year

 

Loans and borrowings

10

350,489

344,499

 

10

Loans and borrowings

2023
£

2022
£

Current loans and borrowings

Other borrowings

1,161,538

1,015,328

2023
£

2022
£

Non-current loans and borrowings

Other borrowings

350,489

344,499

Other borrowings relate to unsecured shareholder loans that are interest free with no fixed repayment terms.

 

11

Provisions

Warranties
£

Additional provisions

77,955

At 31 December 2023

77,955

 

Innovation Automotive Ltd

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2023

 

12

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary shares of £1 each

900,000

900,000

900,000

900,000