Company registration number 01856964 (England and Wales)
MOTORCLEAN LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
MOTORCLEAN LIMITED
COMPANY INFORMATION
Directors
P Cranwell
D Warren
Company number
01856964
Registered office
25 Hornsby Square
Southfields Industrial Park
Basildon
Essex
United Kingdom
SS15 6SD
Auditor
Azets Audit Services
2nd Floor
Regis House
45 King William Street
London
EC4R 9AN
MOTORCLEAN LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of income and retained earnings
8
Balance sheet
9
Notes to the financial statements
10 - 21
MOTORCLEAN LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -
The directors present the strategic report for the year ended 31 March 2024.
Principal activities and review of the business
The Company’s principal activity during the year continued to be the provision of integrated automotive services.
The principal drivers for the results of the business in the year were a strong focus on customer service, new contract wins and expansion of its existing customer base.
The Company faces the same pressures as the rest of the industry, in that it understands that there is a need for competitive pricing whilst maintaining exceptional service delivery, and that the factors affecting this would continue to be the provision of labour, materials, and other such matters in the wider macro environment.
Principal risks and uncertainties
The directors believe that as a business services company, the principal risk to the business is that of customer loss. This is addressed through a proactive management of the Company’s customer base and a measurement of the Company’s Net Promotor Score. Being the first to implement this in the industry, the Company is able to effectively monitor the quality of its service provision, and efficiently react to anything that presents itself as a significant risk. The directors are also aware of their responsibilities in relation to addressing other risks, such as credit risk and interest rate risk however, the possibility of these risks materialising and having any significant impact on the Company are minimal.
Key performance indicators
The directors consider the following to be the key financial performance indicators:
2024
2023
Change
£'000
£'000
%
Turnover
45,640
44,584
2%
Gross profit
6,704
5,290
27%
Gross profit margin
15%
12%
3%
The directors of the business consider the key financial performance indicators to be the level of turnover, gross profit, and gross profit margin.
The Company continues to closely monitor the trading of its individual accounts in terms of revenue and gross profit, as well as proactively driving efficiencies through an assessment of cost.
Stakeholder engagement and Section 172 statement
Motorclean’s Board recognises the critical need to act in the interests of shareholders and wider stakeholders. Consequently, to promote the success of the Company, we strive to foster strong business relationships with customers and suppliers, and to meet the interests of our employees while acting fairly for the benefit of shareholders as a whole.
Engagement with our key stakeholders helps to ensure we have a long-term sustainable business model. Section 172 of the Companies Act 2006 requires Directors to take into consideration the interest of stakeholders in their decision making. Whilst the importance of giving due consideration to our stakeholders is not new, this part of the report serves as our Section 172 statement and sets out how we engage with, and take into consideration, the interests of those key stakeholders who are material to the long-term success of the business.
MOTORCLEAN LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
Statement by the Directors in performance of their statutory duties in accordance with section 172(1) Companies Act 2006
During the year ended 31 March 2024, the Board of Motorclean Limited considers, as individuals and collectively, that it has acted in a way it considers, in good faith, would most likely promote the success of the Company for the benefit of its members as a whole, by having regard, among other matters, to the:
likely long-term consequences of any decision;
interests of the Company’s employees;
need to foster the Company’s relationships with its customers, suppliers and others;
impact of the Company’s operations on the community and the environment;
desirability of the Company maintaining its reputation for high standards of business conduct; and
need to act fairly as between members of the Company.
Motorclean Limited considers that its key stakeholders are its shareholders, employees, customers, and suppliers.
Beneficiaries
The Board seeks to behave in a responsible mannger towards its ultimate Beneficiaries, in order that they too can benefit from the Company achieving its long term business strategy. The Board also seeks to provide periodic information to the Trustees, including management accounts and key performance metrics.
Employees
Our employees remain fundamental to the achievement of our business plan. In addition to aiming to be a responsible employer in our approach to pay and benefits, we continue to engage with our team to ascertain which training and development opportunities should be made available to improve the team’s productivity and our individual employees’ potential within the business.
Customers
Our aim is to ensure that our customers’ needs are met, in particular our services meet their specifications.
Suppliers
We work with a relatively small number of suppliers. Our aim is to develop and enter into strong stable working relationships with our suppliers as this enables us to develop long term partnerships. We seek to be fair and transparent in our dealings with suppliers and we ensure that we honour our arrangements with them.
The stakeholder voice is brought into the boardroom throughout the annual cycle through information provided by management and also by direct engagement with stakeholders themselves.
The consideration for all of our stakeholders remains fundamental to the Company's strategic planning.
D Warren
Director
13 November 2024
MOTORCLEAN LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 March 2024.
Principal activities
The Company's principal activity during the year continued to be the provision of integrated automotive services.
Results and dividends
The earnings for the year before depreciation, amortisation, tangible asset disposal gains and losses, tax, and exceptional items were £2,266,759 (2023: £1,502,359). The profit for the year after taxation amounted to £862,370 (2023: £377,117).
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
P Cranwell
D Warren
Future developments
The Company sees the potential for the strong growth of the business from the extension of services to its existing customer base and from new customers. The company continues to implement a clear strategy, driven by innovation and a culture of continuous improvement; customer service excellence plays a key part in this.
Auditor
Azets Audit Services will be deemed to be re-appointed 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing accounts with the registrar, whichever is earlier.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Going Concern
After making enquiries, the directors have a reasonable expectation that the Company has adequate resources to continue as a going concern for the foreseeable future, given the ongoing profitability of the business and the headroom that exists on its invoice discounting facility.
As such the directors consider it appropriate that the Company continues to adopt the going concern basis in preparing the annual report and financial statements.
On behalf of the board
D Warren
Director
13 November 2024
MOTORCLEAN LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including FRS102 – The reporting Standard applicable to the UK and Republic of Ireland.
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.
In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
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.
MOTORCLEAN LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MOTORCLEAN LIMITED
- 5 -
Opinion
We have audited the financial statements of Motorclean Limited (the 'company') for the year ended 31 March 2024 which comprise the statement of income and retained earnings, the balance sheet and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
MOTORCLEAN LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MOTORCLEAN LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
MOTORCLEAN LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MOTORCLEAN LIMITED
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Toby Mason
Senior Statutory Auditor
For and on behalf of Azets Audit Services
14 November 2024
Chartered Accountants
Statutory Auditor
2nd Floor
Regis House
45 King William Street
London
EC4R 9AN
MOTORCLEAN LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MARCH 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
45,639,622
44,584,369
Cost of sales
(38,935,710)
(39,294,054)
Gross profit
6,703,912
5,290,315
Distribution costs
(2,733,236)
(2,445,626)
Administrative expenses
(2,106,142)
(1,765,839)
Exceptional items
4
(176,690)
(332,492)
Operating profit
5
1,687,844
746,358
Interest payable and similar expenses
8
(401,842)
(294,506)
Profit before taxation
1,286,002
451,852
Tax on profit
9
(423,632)
(74,735)
Profit for the financial year
862,370
377,117
Retained earnings brought forward
535,049
157,932
Retained earnings carried forward
1,397,419
535,049
The profit and loss account has been prepared on the basis that all operations are continuing operations.
MOTORCLEAN LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
10
80,093
142,364
Tangible assets
11
853,777
650,078
933,870
792,442
Current assets
Stocks
12
130,702
129,000
Debtors
13
9,273,127
9,352,250
Cash at bank and in hand
88,325
9,492,154
9,481,250
Creditors: amounts falling due within one year
14
(8,718,694)
(9,574,778)
Net current assets/(liabilities)
773,460
(93,528)
Total assets less current liabilities
1,707,330
698,914
Creditors: amounts falling due after more than one year
15
(201,739)
(129,221)
Provisions for liabilities
Deferred tax liability
18
107,171
33,643
(107,171)
(33,643)
Net assets
1,398,420
536,050
Capital and reserves
Called up share capital
20
1,001
1,001
Profit and loss reserves
1,397,419
535,049
Total equity
1,398,420
536,050
The financial statements were approved by the board of directors and authorised for issue on 13 November 2024 and are signed on its behalf by:
D Warren
Director
Company Registration No. 01856964
MOTORCLEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
1
Accounting policies
Company information
Motorclean Limited is a private company limited by shares incorporated in England and Wales. The registered office is 25 Hornsby Square, Southfields Industrial Park, Basildon, Essex, United Kingdom, SS15 6SD.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements of the Company are prepared under the historical cost convention and in accordance with applicable accounting standards.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Fullfield Ltd. These consolidated financial statements are available from Companies House.
The Company meets the definition of a qualifying entity under FRS 100 (Financial Reporting Standard 100) issued by the Financial Reporting Council. These financial statements were prepared in accordance with Financial Reporting Standard 102 ‘Reduced Disclosure Framework’ as issued by the Financial Reporting Council.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Turnover is recognised at the point at which the service is provided and to the extent that it is probable that the economic benefits will flow to the company.
MOTORCLEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 11 -
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Software
Over 4 years straight line
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and equipment
Over 4 years straight line
Motor vehicles
Over 4 years straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
1.8
Stocks
Stocks of cleaning materials are stated at the lower of cost and their net realisable value. Cost comprises direct materials and, where applicable, those overheads that have been incurred in bringing the stocks to their present location and condition.
MOTORCLEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 12 -
1.9
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.10
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
MOTORCLEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 13 -
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.11
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
MOTORCLEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
MOTORCLEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 15 -
3
Turnover
Turnover represents amounts invoiced to third parties and is attributable to one continuing activity carried out in the United Kingdom.
4
Exceptional item
2024
2023
£
£
Expenditure
Exceptional costs
176,690
332,492
5
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
33,000
32,000
Depreciation of owned tangible fixed assets
401,708
340,561
(Profit)/loss on disposal of tangible fixed assets
(56,500)
11,543
Amortisation of intangible assets
62,271
71,405
Operating lease charges
72,590
63,583
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Cleaning staff
65
66
Administration staff
54
54
Total
119
120
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
4,722,857
4,424,700
Social security costs
567,872
530,898
Pension costs
200,072
194,666
5,490,801
5,150,264
MOTORCLEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 16 -
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
423,278
443,985
Company pension contributions to defined contribution schemes
80,000
80,000
503,278
523,985
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
219,436
220,737
Company pension contributions to defined contribution schemes
40,000
40,000
8
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
5,254
-
Interest on invoice finance arrangements
371,334
281,870
Interest on finance leases and hire purchase contracts
25,254
12,636
401,842
294,506
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
350,104
91,811
Deferred tax
Origination and reversal of timing differences
73,528
(17,076)
Total tax charge
423,632
74,735
MOTORCLEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
9
Taxation
(Continued)
- 17 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
1,286,002
451,852
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
321,501
85,852
Tax effect of expenses that are not deductible in determining taxable profit
(7,882)
72,189
Adjustments in respect of prior years
66,353
Permanent capital allowances in excess of depreciation
43,660
(64,708)
Research and development tax credit
(18,598)
Taxation charge for the year
423,632
74,735
10
Intangible fixed assets
Goodwill
Software
Total
£
£
£
Cost
At 1 April 2023 and 31 March 2024
3,224,352
644,010
3,868,362
Amortisation and impairment
At 1 April 2023
3,224,352
501,646
3,725,998
Amortisation charged for the year
62,271
62,271
At 31 March 2024
3,224,352
563,917
3,788,269
Carrying amount
At 31 March 2024
80,093
80,093
At 31 March 2023
142,364
142,364
MOTORCLEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 18 -
11
Tangible fixed assets
Plant and equipment
Motor vehicles
Total
£
£
£
Cost
At 1 April 2023
1,782,516
729,706
2,512,222
Additions
64,192
612,351
676,543
Disposals
(326,762)
(326,762)
At 31 March 2024
1,846,708
1,015,295
2,862,003
Depreciation and impairment
At 1 April 2023
1,466,773
395,371
1,862,144
Depreciation charged in the year
149,102
252,606
401,708
Eliminated in respect of disposals
(255,626)
(255,626)
At 31 March 2024
1,615,875
392,351
2,008,226
Carrying amount
At 31 March 2024
230,833
622,944
853,777
At 31 March 2023
315,743
334,335
650,078
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2024
2023
£
£
Plant and equipment
46,243
46,077
Motor vehicles
578,246
327,772
624,489
373,849
12
Stocks
2024
2023
£
£
Raw materials and consumables
130,702
129,000
The difference between purchase price and the replacement cost is not material.
MOTORCLEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
5,418,871
5,821,939
Amounts owed by group undertakings
3,615,467
3,137,302
Other debtors
75,600
256,348
Prepayments and accrued income
163,189
136,661
9,273,127
9,352,250
14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Invoice discounting facility and overdrafts
16
3,560,375
4,917,622
Obligations under finance leases
17
279,415
152,649
Trade creditors
2,200,278
1,977,806
Amounts owed to group undertakings
542,725
920,068
Corporation tax
400,895
149,061
Other taxation and social security
1,037,193
784,175
Other creditors
45,991
308,315
Accruals and deferred income
651,822
365,082
8,718,694
9,574,778
The invoice discounting facility of £8m is in place with a UK clearing bank. The interest charged is at the Bank of England base rate plus 1.8% and the facility is repayable on demand. The facility holds a fixed and floating charge over all the company’s assets.
15
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under finance leases
17
201,739
129,221
16
Loans and overdrafts
2024
2023
£
£
Bank loans
3,560,375
4,554,590
Bank overdrafts
363,032
3,560,375
4,917,622
Payable within one year
3,560,375
4,917,622
MOTORCLEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
16
Loans and overdrafts
(Continued)
- 20 -
The invoice discounting facility of £8m is in place with a UK clearing bank. The interest charged is at the Bank of England base rate plus 1.8% and the facility is repayable on demand. The facility holds a fixed and floating charge over all the company’s assets.
17
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
279,415
152,649
In two to five years
201,739
129,221
481,154
281,870
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
107,171
33,643
2024
Movements in the year:
£
Liability at 1 April 2023
33,643
Charge to profit or loss
73,528
Liability at 31 March 2024
107,171
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
MOTORCLEAN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
200,072
194,666
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,001
1,001
1,001
1,001
21
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
89,788
112,923
Between two and five years
102,187
55,479
191,975
168,402
22
Ultimate controlling party
The directors consider the ultimate parent undertaking and controlling party to be Fullfield Limited during the financial year ended 31 March 2024.
The parent undertaking of the smallest and largest group of undertakings for which group financial statements are drawn up and of which the Company is a member is Fullfield Limited.
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