Registered number:
For the Year Ended
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Clare James Automotive Limited
Company Information
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Clare James Automotive Limited
Contents
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Clare James Automotive Limited
Group Strategic Report
For the Year Ended 31 March 2024
The Group’s activities comprise the Lightcliffe Skoda Warrington Retailer and five VWG Trade Parts Specialist businesses. The directors report that in the year ended 31 March 2024 these businesses generated a group profit before taxation of £404,264 (2023: £840,553).
Whilst customer demand for new and used cars was consistent with the previous year, new car gross margins were adversely impacted by an increase in the Motability content in the sales mix from 33% to 58% and, as expected, there was increased pressure on used car margins. The VWG Trade Parts Specialist businesses was impacted by reduced demand for parts in both the mechanical and accident repair channels. The independent repair specialists, who form the core of the mechanical parts channel, experienced reduced footfall and a number have withdrawn from the market. The reduced supply of parts to accident repairers was a result of fewer accidents during a mild winter and repairers and insurers moving away from genuine parts in order to reduce repair costs. Future developments Looking to the future, the businesses continue to be operating in a difficult economic climate despite positive news in respect of inflation, interest rates, energy and fuel costs which impact consumer spending and the costs of operating the business. However, we are optimistic that new and used car demand will be sustainable.
The management of the business and the execution of the Group's strategy is subject to a number of risks. The factors described below highlight risks and uncertainties which affect the Group, but they are not intended to be an exhaustive analysis of all the potential risks which may arise in the ordinary course of business.
The directors are of the opinion that sufficient internal controls have been implemented to monitor these factors and to enable timely management action to be taken to mitigate the risks. Financial and business risks The key financial risks faced by the Group remain that of interest rate risk, ongoing adequacy of funding and credit risk. The key business risks faced by the Group remain that of regulatory and compliance risk, competition risk, manufacturer risk, product supply risk, employee risk and information systems risks. Interest rate risk The Group is exposed to interest rate risk on its borrowings, and changes in interest rates can impact the cost of servicing this debt. The directors are of the opinion that the increases in Bank of England Base Rate experienced in 2022 and 2023 have now peaked and these rates have been factored into the budgets for 2024. In light of this, the use of financial instruments to mitigate potential financial exposure would not be appropriate at this time. Adequacy of funding The directors are confident that the current banking and finance facilities are adequate for the Group's anticipated working capital requirements. The Group manages its cash flow on a long term, medium term and daily basis to ensure that there is sufficient liquidity to meet foreseeable day-to-day trading and the long-term requirements of the business, including expected capital investment. Short-term flexibility can be managed by the availability of overdraft facilities.
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Clare James Automotive Limited
Group Strategic Report (continued)
For the Year Ended 31 March 2024
Credit risk
The Group has low credit risk in relation to its trade debts. Vehicles are not released to retail customers until cleared funds have been received or confirmation that a customer's application for finance has been accepted and paid out by the finance house. Where customers are granted credit terms in respect of fleet vehicle purchases, vehicle repairs and parts, credit checks are carried out and credit limits are set which are reviewed on a regular basis in conjunction with debt ageing and collection experience. The directors are satisfied that credit risk is adequately managed, and the level of bad debts is consistent with the nature of the industry. Regulatory and compliance risk The Group is subject to a regulatory compliance risk which can arise from failing to comply with applicable laws, regulations and codes set out by, amongst others, the Financial Conduct Authority ("FCA"), Trading Standards, the Driver & Vehicle Standards Agency (''DVSA''), Information Commissioner's Office ("ICO"), local authorities and the manufacturers it represents. Non-compliance can lead to financial penalties, enforced suspension from sales of finance and insurance products or, in the extreme, closure of parts of the business. The Group is fully aware of these risks and its policies are designed to ensure that all members of staff are aware of the risks, which are mitigated by appropriate training and the correct application of policies. With regards to FCA requirements, the Group is an Appointed Representative of Automotive Compliance Limited which is authorised and regulated by the Financial Conduct Authority. The Group also engages an internal Compliance Officer to monitor compliance. Competition risk The Group competes for the sale of new and used vehicles, the performance of repairs, routine maintenance business and the supply of spare parts with other franchised and independent motor retailers, suppliers of parts and internet-based suppliers. The principal competitive factors are customer service, product price and brand reputation. Continued investment in people, brands, facilities, and systems enables the Group to maintain its competitive advantage by implementing industry-leading initiatives. Manufacturer risk The Group depends upon the ability of its manufacturer partner to respond to changes in consumer tastes, technological developments, and methods of delivery of products and services. The timing, frequency, and efficiency of managing the new product life cycle can materially affect the Group's business. The Group is well aware of the potential reputational and financial impact on retailers of the reputation of its manufacturer partners. Strategic management of the franchise the Group represents is therefore critical to the Group's success. The directors are not aware of any current circumstances which may jeopardise the Group's current franchise agreement. The Group works closely with its manufacturing partner to maintain a mutually beneficial long-term relationship. Employee risk The Group is dependent on all team members, both management and other skilled individuals. The Group's future financial performance depends on its ability to recruit and retain skilled members who embody the Group's culture and values. The Group invests in staff development and career progression opportunities, offering a positive working environment.
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Clare James Automotive Limited
Group Strategic Report (continued)
For the Year Ended 31 March 2024
Information system risk
The Group is dependent on its information technology and computer systems and those of its manufacturer partners, as any disruption to their operation could have a detrimental effect on the business. The company invests in robust IT infrastructure, implements regular security updates, and follows best practices in data protection and cyber security. A robust business continuity planning process is followed with alternative conduits for data and communications in the event of business disruption.
This report was approved by the board and signed on its behalf.
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Clare James Automotive Limited
Directors' Report
For the Year Ended 31 March 2024
The directors present their report and the financial statements for the year ended 31 March 2024.
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 Group's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation and minority interests, amounted to £92,107 (2023 - profit £151,073).
Dividends of £Nil (2023: £Nil) were declared during the year. The directors do not recommend the payment of a final dividend.
The directors who served during the year were:
The likely future developments in the Group's business are referred to in the Group Strategic Report.
Financial instruments risks The Group's risks in relation to financial instruments are referred to in the Group Strategic Report.
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Clare James Automotive Limited
Directors' Report (continued)
For the Year Ended 31 March 2024
On 10 June 2024, the Group completed the sale of a property held within Fixed Assets for total proceeds of £500,000. The net book value of the property at the time of sale was £399,185, and the associated costs of disposal amounted to £9,680. This resulted in a net profit on disposal of £91,135.
The auditors, Hurst Accountants Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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Clare James Automotive Limited
Independent Auditors' Report to the Members of Clare James Automotive Limited
We have audited the financial statements of Clare James Automotive Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 March 2024, which comprise the Consolidated Statement of Income and Retained Earnings, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company 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).
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 Group 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 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 Group's or the parent 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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Clare James Automotive Limited
Independent Auditors' Report to the Members of Clare James Automotive 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group 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 Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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Clare James Automotive Limited
Independent Auditors' Report to the Members of Clare James Automotive 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 Group 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:
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. Identifying and assessing potential risks related to irregularities In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
∙The nature of the industry and sector in which the company operates; the control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets.
∙The outcome of enquiries of local management and parent company management, including whether management was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge of any actual, suspected, or alleged fraud.
∙Supporting documentation relating to the Company's policies and procedures for:
°Identifying, evaluating, and complying with laws and regulations
°Detecting and responding to the risks of fraud
∙The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
∙The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
∙The legal and regulatory framework in which the Company operates, particularly those laws and regulations which have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or which had a fundamental effect on the operations of the Company, including General Data Protection requirements,and Anti-bribery and Corruption.
Audit response to risks identified
Our procedures to respond to the risks identified included the following:
∙Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the provisions of those relevant laws and regulations which have a direct effect on the financial statements.
∙Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud.
∙Evaluation and testing of the operating effectiveness of management’s controls designed to prevent and detect irregularities.
∙Enquiring of management about any actual and potential litigation and claims.
∙Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatement due to fraud.
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Clare James Automotive Limited
Independent Auditors' Report to the Members of Clare James Automotive Limited (continued)
We have also considered the risk of fraud through management override of controls by:
∙Testing the appropriateness of journal entries and other adjustments. We have used data analytics software to identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or error;Testing the appropriateness of journal entries and other adjustments.
∙Challenging assumptions made by management in their significant accounting estimates, and assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and
∙Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them. Also, 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 or intentional misrepresentations, or through collusion.
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.
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 Auditors
3 Stockport Exchange
Cheshire
SK1 3GG
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Clare James Automotive Limited
Consolidated Statement of Income and Retained Earnings
For the Year Ended 31 March 2024
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Clare James Automotive Limited
Registered number: 05082322
Consolidated Balance Sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 18 to 36 form part of these financial statements.
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Clare James Automotive Limited
Registered number: 05082322
Company Balance Sheet
As at
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Clare James Automotive Limited
Registered number: 05082322
Company Balance Sheet (continued)
As at 31 March 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 18 to 36 form part of these financial statements.
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Clare James Automotive Limited
Consolidated Statement of Changes in Equity
For the Year Ended 31 March 2024
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Clare James Automotive Limited
Company Statement of Changes in Equity
For the Year Ended 31 March 2024
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Clare James Automotive Limited
Consolidated Statement of Cash Flows
For the Year Ended 31 March 2024
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Clare James Automotive Limited
Consolidated Statement of Cash Flows (continued)
For the Year Ended 31 March 2024
Consolidated Analysis of Net Debt
For the Year Ended 31 March 2024
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Clare James Automotive Limited
Notes to the Financial Statements
For the Year Ended 31 March 2024
Clare James Automotive Limited is a private company limited by share capital and incorporated in the United Kingdom. The Company's registered number is 05082322 and its registered office is The Pinnacle, 170 Midsummer Boulevard, Milton Keynes, MK9 1FE.
The principal activity of the Group and Company is that of a motor vehicle retailer including the sale of new and used vehicles, parts and accessories together with the provision of mechanical and body repair services.
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 Group management to exercise judgement in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Income and Retained Earnings and Statement of Cash Flow in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Income and Retained Earnings from the date on which control is obtained. They are deconsolidated from the date control ceases.
The financial statements have been prepared on a going concern basis. The following paragraphs set out the basis on which the directors have reached their conclusion.
The Group has a profit before tax of £404,264 (2023: £840,553) and net assets totalling £2,100,738 (2023: £2,335,075) at 31 March 2024. The Group currently meets its working capital requirements through its cash balances and credit facilities and monitors its cash flow forecasts for the short, medium and long term on an ongoing basis. Based on the Group's forecasts and projections the directors believe they have sufficient facilities to trade through the next twelve months. The directors believe it is appropriate, therefore, to prepare the consolidated financial statements to 31 March 2024 on a going concern basis and the Group and Company will remain solvent in the twelve months after the date of approval of the financial statements.
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Clare James Automotive Limited
Notes to the Financial Statements
For the Year Ended 31 March 2024
2.Accounting policies (continued)
Revenue is measured at invoice price, excluding value added taxes, and principally comprises external vehicle sales, parts, servicing and bodyshop sales. Vehicle and parts sales are recognised when control over the vehicles or parts have been transferred to the customer. This is generally at the time of delivery to the customer. Service and bodyshop sales are recognised in-line with the work performed. The subsidiary acts as an agent, and receives commission, for the supply of parts on behalf of Volkswagen Group United Kingdom. Commission income is recognised within revenue in the period in which the related product is sold and receipt of payment can be assured.
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Clare James Automotive Limited
Notes to the Financial Statements
For the Year Ended 31 March 2024
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
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.
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Clare James Automotive Limited
Notes to the Financial Statements
For the Year Ended 31 March 2024
2.Accounting policies (continued)
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
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Clare James Automotive Limited
Notes to the Financial Statements
For the Year Ended 31 March 2024
2.Accounting policies (continued)
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.
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Clare James Automotive Limited
Notes to the Financial Statements
For the Year Ended 31 March 2024
Investment property - Judgement The fair value of investment properties is determined at each reporting date. Management has applied judgement in estimating the fair value of the property due to the nature of the property market and economic conditions. The fair value is determined by independent external valuers or by the company’s directors using market data and comparable transactions. The group has investment property with a carrying value of £1,474,027 (2023: £1,569,853). Stock provison - Estimate Management reviews the stock valuation using third-party data. Provision for impairment is made where net realisable value is less than the cost based on best estimates by the management. As at 31 March 2024, the value of stock net of provision was £2,683,708 (2023: £1,370,015).
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Clare James Automotive Limited
Notes to the Financial Statements
For the Year Ended 31 March 2024
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Clare James Automotive Limited
Notes to the Financial Statements
For the Year Ended 31 March 2024
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Clare James Automotive Limited
Notes to the Financial Statements
For the Year Ended 31 March 2024
The company has trading losses of £428,924 (2023: £448,768) available to carry forward and offset against future taxable profits. These losses have not been recognised as a deferred tax asset in the financial statements.
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Clare James Automotive Limited
Notes to the Financial Statements
For the Year Ended 31 March 2024
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Clare James Automotive Limited
Notes to the Financial Statements
For the Year Ended 31 March 2024
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Clare James Automotive Limited
Notes to the Financial Statements
For the Year Ended 31 March 2024
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Clare James Automotive Limited
Notes to the Financial Statements
For the Year Ended 31 March 2024
The 2024 valuations were made by the directors, on an open market value for existing use basis.
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Clare James Automotive Limited
Notes to the Financial Statements
For the Year Ended 31 March 2024
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Clare James Automotive Limited
Notes to the Financial Statements
For the Year Ended 31 March 2024
Obligations under finance lease and hire purchase contracts are secured against the assets to which they relate.
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Clare James Automotive Limited
Notes to the Financial Statements
For the Year Ended 31 March 2024
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Clare James Automotive Limited
Notes to the Financial Statements
For the Year Ended 31 March 2024
Capital redemption reserve
Profit and loss account
The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £113,658 (2023: £120,614). Contributions totalling £17,633 (2023: £15,914) were payable to the fund at the balance sheet date.
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Clare James Automotive Limited
Notes to the Financial Statements
For the Year Ended 31 March 2024
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Clare James Automotive Limited
Notes to the Financial Statements
For the Year Ended 31 March 2024
The ultimate controlling party of the group is I J Rutter, by virtue of his majority shareholding.
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