Company registration number 10282440 (England and Wales)
A6 MOTOR COMPANY BOLTON LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
A6 MOTOR COMPANY BOLTON LIMITED
COMPANY INFORMATION
Director
A Barton
Company number
10282440
Registered office
51 Miry Lane
Wigan
Greater Manchester
WN3 4BT
Auditor
Champion Accountants LLP
1 Worsley Court
High Street
Worsley
Manchester
M28 3NJ
A6 MOTOR COMPANY BOLTON LIMITED
CONTENTS
Page
Strategic report
1
Director's report
2
Director's responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 21
A6 MOTOR COMPANY BOLTON LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2024
- 1 -
The director presents the strategic report for the year ended 31 July 2024.
Review of the business
In 2024, the Company returned to profitability after a difficult year in 2023, which was impacted by the cost of living crisis and rising interest rates. Since then, market conditions have improved, with inflation returning to typical levels and interest rates stabilizing and beginning to decrease. The Company aims to build on the stabilization achieved in 2024 and increase profitability in 2025. To achieve this, the Company has acquired a new preparation site and hired additional staff. These steps will not only help meet current demand but also enable the Company to increase vehicle sales going forward.
Principal risks and uncertainties
Stock – Buying and selling cars at appropriate prices along with keeping accurate carrying values. The company has mitigated this risk by employing experienced key management staff who regularly monitor stock holding periods along with data from the used car sales market to ensure cars are priced appropriately, which minimises the time held in stock and maximises profits.
Interest rates – The company is exposed to interest rate risk on its borrowings, however this is managed by having a mix of fixed and variable rate debt which reduces its exposure to movements in rates.
Key performance indicators
The Director and key management staff regularly review the following financial key performance indicators:
Turnover £33,495,609 (2023: £32,827,707)
Gross Profit Margin 5.14% (2023: 4.01%)
Earnings Before Interest, Taxation, Depreciation and Amortisation £936,647 (2023: £463,700)
Non-financial key performance indicators including customer satisfaction surveys, customer reviews and customer complaints are also monitored closely with the aim of improving the business.
A Barton
Director
2 December 2024
A6 MOTOR COMPANY BOLTON LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 JULY 2024
- 2 -
The director presents his annual report and financial statements for the year ended 31 July 2024.
Principal activities
The principal activity of the company continued to be that of car sales.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £132,973. The director does not recommend payment of a further dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
A Barton
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
A Barton
Director
2 December 2024
A6 MOTOR COMPANY BOLTON LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JULY 2024
- 3 -
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is 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 director is required to:
select suitable accounting policies 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 company will continue in business.
The director is 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. He is 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.
A6 MOTOR COMPANY BOLTON LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF A6 MOTOR COMPANY BOLTON LIMITED
- 4 -
Opinion
We have audited the financial statements of A6 Motor Company Bolton Limited (the 'company') for the year ended 31 July 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows 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 July 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 director's 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 director 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 director is 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 director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
A6 MOTOR COMPANY BOLTON LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF A6 MOTOR COMPANY BOLTON LIMITED (CONTINUED)
- 5 -
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 director's 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 director
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
As part of our planning process:
- We enquired of management the systems and controls the company has in place, the areas of the financial statements that are mostly susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. The company did not inform us of any known, suspected or alleged fraud.
- We obtained an understanding of the legal and regulatory frameworks applicable to the company. We determined that the following were most relevant: FRS 102 and Companies Act 2006.
- We considered the incentives and opportunities that exist in the company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetuated, and tailored our risk assessment
accordingly.
- Using our knowledge of the company, together with the discussions held with the company at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.
A6 MOTOR COMPANY BOLTON LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF A6 MOTOR COMPANY BOLTON LIMITED (CONTINUED)
- 6 -
The key procedures we undertook to detect irregularities including fraud during the course of the audit included:
- Identifying and testing journal entries and the overall accounting records, in particular those that were significant and unusual.
- Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.
- Reviewing and challenging the assumptions and judgements used by management in their significant accounting estimates, in particular in relation to stock valuation and cut-off.
- Assessing the extent of compliance, or lack of, with the relevant laws and regulations.
- Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
- Testing key revenue lines, in particular cut-off, for evidence of management bias.
- Obtaining third-party confirmation of material bank balances.
- Documenting and verifying all significant related party balances and transactions.
There are inherent limitations in the audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. The risk of not detecting a material misstatement resulting from fraud is higher than one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
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.
Mark Turner FCA
Senior Statutory Auditor
For and on behalf of Champion Accountants LLP
2 December 2024
Chartered Accountants
Statutory Auditor
1 Worsley Court
High Street
Worsley
Manchester
M28 3NJ
A6 MOTOR COMPANY BOLTON LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2024
- 7 -
2024
2023
Notes
£
£
Turnover
3
33,495,609
32,827,707
Cost of sales
(31,774,866)
(31,510,450)
Gross profit
1,720,743
1,317,257
Administrative expenses
(819,453)
(884,734)
Operating profit
4
901,290
432,523
Interest payable and similar expenses
7
(564,290)
(543,201)
Profit/(loss) before taxation
337,000
(110,678)
Tax on profit/(loss)
8
(90,653)
17,542
Profit/(loss) for the financial year
246,347
(93,136)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
A6 MOTOR COMPANY BOLTON LIMITED
BALANCE SHEET
- 8 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
131,574
161,115
Current assets
Stocks
11
7,099,149
6,684,546
Debtors
12
80,765
107,522
Cash at bank and in hand
719,120
260,403
7,899,034
7,052,471
Creditors: amounts falling due within one year
13
(6,270,864)
(5,257,494)
Net current assets
1,628,170
1,794,977
Total assets less current liabilities
1,759,744
1,956,092
Creditors: amounts falling due after more than one year
14
(575,187)
(885,189)
Provisions for liabilities
Deferred tax liability
16
280
(280)
-
Net assets
1,184,277
1,070,903
Capital and reserves
Called up share capital
18
100
100
Profit and loss reserves
1,184,177
1,070,803
Total equity
1,184,277
1,070,903
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved and signed by the director and authorised for issue on 2 December 2024
A Barton
Director
Company registration number 10282440 (England and Wales)
A6 MOTOR COMPANY BOLTON LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2024
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 August 2022
100
1,281,089
1,281,189
Year ended 31 July 2023:
Loss and total comprehensive income
-
(93,136)
(93,136)
Dividends
9
-
(117,150)
(117,150)
Balance at 31 July 2023
100
1,070,803
1,070,903
Year ended 31 July 2024:
Profit and total comprehensive income
-
246,347
246,347
Dividends
9
-
(132,973)
(132,973)
Balance at 31 July 2024
100
1,184,177
1,184,277
A6 MOTOR COMPANY BOLTON LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JULY 2024
- 10 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
21
810,778
(167,402)
Interest paid
(564,290)
(543,201)
Income taxes (paid)/refunded
(30,308)
1,542
Net cash inflow/(outflow) from operating activities
216,180
(709,061)
Investing activities
Purchase of tangible fixed assets
(5,817)
(82,244)
Repayment of loans
37,450
Net cash used in investing activities
(5,817)
(44,794)
Financing activities
Repayment of bank loans
370,601
848,515
Payment of finance leases obligations
(1,125)
Dividends paid
(132,973)
(117,150)
Net cash generated from financing activities
237,628
730,240
Net increase/(decrease) in cash and cash equivalents
447,991
(23,615)
Cash and cash equivalents at beginning of year
260,403
284,018
Cash and cash equivalents at end of year
708,394
260,403
Relating to:
Cash at bank and in hand
719,120
260,403
Bank overdrafts included in creditors payable within one year
(10,726)
A6 MOTOR COMPANY BOLTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
- 11 -
1
Accounting policies
Company information
A6 Motor Company Bolton Limited is a private company limited by shares incorporated in England and Wales. The registered office is 51 Miry Lane, Wigan, Greater Manchester, WN3 4BT.
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 have been prepared under the historical cost convention, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues 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 goods and 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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
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:
Leasehold improvements
over term of lease
Plant and equipment
10% straight line
Fixtures and fittings
10% reducing balance
Computers
33.33% 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.
A6 MOTOR COMPANY BOLTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 12 -
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
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.
1.8
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.
A6 MOTOR COMPANY BOLTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 13 -
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.
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.
A6 MOTOR COMPANY BOLTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 14 -
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.
1.9
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.
1.10
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.
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.
A6 MOTOR COMPANY BOLTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 15 -
1.11
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
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.
1.14
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is 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.
3
Turnover
2024
2023
£
£
Turnover analysed by class of business
Car Sales
32,451,392
32,062,440
Warranties
323,683
252,816
Commission
433,772
341,670
Paint Protection
140,050
107,709
Others
146,712
63,072
33,495,609
32,827,707
A6 MOTOR COMPANY BOLTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 16 -
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
9,500
10,500
Depreciation of owned tangible fixed assets
35,358
31,177
Operating lease charges
167,649
180,393
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Directors
1
1
Sales
5
4
Mechanics
5
4
Valeters
4
4
Bodyshop
1
1
Admin
3
3
Total
19
17
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
665,555
614,447
Social security costs
54,913
39,454
Pension costs
13,375
10,135
733,843
664,036
6
Director's remuneration
2024
2023
£
£
Remuneration for qualifying services
8,400
8,400
A6 MOTOR COMPANY BOLTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 17 -
7
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
564,129
541,154
Other interest on financial liabilities
161
1,731
564,290
542,885
Other finance costs:
Interest on finance leases and hire purchase contracts
-
316
564,290
543,201
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
88,957
(25,322)
Adjustments in respect of prior periods
(1,542)
Total current tax
87,415
(25,322)
Deferred tax
Origination and reversal of timing differences
3,238
7,780
Total tax charge/(credit)
90,653
(17,542)
The actual charge/(credit) for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit/(loss) before taxation
337,000
(110,678)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.40%)
84,250
(21,472)
Tax effect of expenses that are not deductible in determining taxable profit
3,171
(2,096)
Effect of change in corporation tax rate
3,391
Permanent capital allowances in excess of depreciation
6,050
Depreciation on assets not qualifying for tax allowances
4,774
(3,198)
Under/(over) provided in prior years
(1,542)
(217)
Taxation charge/(credit) for the year
90,653
(17,542)
A6 MOTOR COMPANY BOLTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 18 -
9
Dividends
2024
2023
£
£
Final paid
132,973
117,150
10
Tangible fixed assets
Leasehold improvements
Plant and equipment
Fixtures and fittings
Computers
Total
£
£
£
£
£
Cost
At 1 August 2023
113,948
92,996
64,988
8,967
280,899
Additions
5,817
5,817
At 31 July 2024
113,948
98,813
64,988
8,967
286,716
Depreciation and impairment
At 1 August 2023
70,986
26,103
18,759
3,936
119,784
Depreciation charged in the year
19,095
9,609
4,623
2,031
35,358
At 31 July 2024
90,081
35,712
23,382
5,967
155,142
Carrying amount
At 31 July 2024
23,867
63,101
41,606
3,000
131,574
At 31 July 2023
42,962
66,893
46,229
5,031
161,115
11
Stocks
2024
2023
£
£
Finished goods and goods for resale
7,099,149
6,684,546
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
54,603
65,631
Other debtors
25,250
35,611
Prepayments and accrued income
912
3,322
80,765
104,564
Deferred tax asset (note 16)
2,958
80,765
107,522
A6 MOTOR COMPANY BOLTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 19 -
13
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
15
5,112,645
4,421,316
Trade creditors
732,116
601,700
Corporation tax
88,957
31,850
Other taxation and social security
154,723
11,528
Other creditors
86,308
135,697
Accruals and deferred income
96,115
55,403
6,270,864
5,257,494
Within the bank loans, a stock financing of £4,791,918 (2023: £4,137,252) is secured against the stock.
14
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
15
575,187
885,189
15
Loans and overdrafts
2024
2023
£
£
Bank loans
5,677,106
5,306,505
Bank overdrafts
10,726
5,687,832
5,306,505
Payable within one year
5,112,645
4,421,316
Payable after one year
575,187
885,189
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
Assets
Assets
2024
2023
2024
2023
Balances:
£
£
£
£
Accelerated capital allowances
280
-
-
2,958
A6 MOTOR COMPANY BOLTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
16
Deferred taxation
(Continued)
- 20 -
2024
Movements in the year:
£
Asset at 1 August 2023
(2,958)
Charge to profit or loss
3,238
Liability at 31 July 2024
280
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.
17
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
13,375
10,135
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.
18
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A of £1 each
95
95
95
95
Ordinary B of £1 each
5
5
5
5
100
100
100
100
19
Operating lease commitments
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
188,373
149,607
Between two and five years
58,746
175,453
247,119
325,060
A6 MOTOR COMPANY BOLTON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 21 -
20
Directors' transactions
Dividends totalling £87,354 (2023 - £71,266) were paid in the year in respect of shares held by the company's directors.
The director has given a personal guarantee in the sum of £100,000 (2023: £100,000) against a bank loan.
21
Cash generated from/(absorbed by) operations
2024
2023
£
£
Profit/(loss) for the year after tax
246,347
(93,136)
Adjustments for:
Taxation charged/(credited)
90,653
(17,542)
Finance costs
564,290
543,201
Depreciation and impairment of tangible fixed assets
35,358
31,177
Movements in working capital:
Increase in stocks
(414,603)
(882,025)
Decrease in debtors
23,799
73,287
Increase in creditors
264,934
177,636
Cash generated from/(absorbed by) operations
810,778
(167,402)
22
Analysis of changes in net debt
1 August 2023
Cash flows
31 July 2024
£
£
£
Cash at bank and in hand
260,403
458,717
719,120
Bank overdrafts
(10,726)
(10,726)
260,403
447,991
708,394
Borrowings excluding overdrafts
(5,306,505)
(370,601)
(5,677,106)
(5,046,102)
77,390
(4,968,712)
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