Company registration number 02921629 (England and Wales)
KARL VELLA AUTOBODY REPAIRS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
KARL VELLA AUTOBODY REPAIRS LIMITED
COMPANY INFORMATION
Director
Mr K B Vella MBE
Secretary
Mrs M Vella
Company number
02921629
Registered office
Gillibrands Road
Skelmersdale
WN8 9TA
Auditor
MHA
Richard House
9 Winckley Square
Preston
PR1 3HP
KARL VELLA AUTOBODY REPAIRS LIMITED
CONTENTS
Page
Strategic report
1 - 3
Director's report
4 - 5
Director's responsibilities statement
6
Independent auditor's report
7 - 9
Profit and loss account
10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Notes to the financial statements
14 - 27
KARL VELLA AUTOBODY REPAIRS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 1 -

The director presents the strategic report for the year ended 30 June 2024.

Review of the business

The 2023-24 financial year was a positive year for the business, with strong financial and operational results and further expansion across the country.

The year saw a continuance of the strategic planning enacted last year, which has provided a stable environment for the business to operate in, despite ongoing economic difficulties in the general UK economy, and disruptions in the automotive repair market.

This has allowed the business to maintain a high level of reinvestment and growth through the year, with ongoing investments in apprentices, training, digital solutions, ESG and equipment.

The business returned a profit of £1,715,070 for the year, an increase of 65.8%, Revenue generated by the business was £38,147,841, an increase of 13.0%.

The Directors and Senior Leadership Team have been pleased with the results for the year, especially with the a background of economic uncertainty and initiatives in the business to ensure growth and innovation keep pace with broader developments in the market

Relations with key partners in the supply chain have remained strong, with performance for insurer clients maintaining a high level of consistency.

KARL VELLA AUTOBODY REPAIRS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 2 -
Principal risks and uncertainties

The UK economy has continued to experience difficulties through the year. While rates of inflation have slowed, and interest rates have decreased, there are still systemic issues that have led to uncertainty in many businesses and the overall economic environment looks set to remain challenging.

The business reviews the overall economic and market conditions regularly and establishes relevant risk, as part of strategic planning sessions. External partners such as insurer clients, large scale suppliers and financial institutions are consulted with to help shape actions designed to deal with any issues and potential other problems that are identified.

Workforce related risks remain the most pressing in the industry, with general staffing and skills shortages leading to notable pressures on salaries in what remains a very competitive environment.

The business has mitigated these issues by maintaining its award-winning apprenticeship programme and building on existing employee-based initiatives designed to cement the business’ position as an employer of choice.

While retention has remained at high levels and recruitment initiatives successful, wage inflation and shortages of suitable candidates will remain a pressing issue for some time.

The business continues to work with insurer clients and supply chain partners, to flag risks and ongoing cost pressures, to help ensure that there is awareness around the economic risks and challenges for repairers in the market.

The business maintains a digital roadmap, that is designed to help reduce these risks through tech related solutions.

The Directors and Leadership Team remain confident that the business will be able to meet its obligations over the next 12 months and reviews and future cashflow forecasts are in place, supported by a robust strategic business plan. Confidence is high that the group will meet all liabilities as they are expected to fall for at least the next twelve months. The Directors and Leadership Team conclude that there are no material uncertainties over adopting the going concern basis at the time of signing the financial statements of the group.

The group manages its borrowing requirements in order to minimise interest costs, whilst ensuring that there are sufficient liquid resources to meet the operating needs of the business. Relations with funders remain strong and are actively engaged with to ensure there are no liquidity risks.

The group is exposed to cash flow interest rate risk on bank overdrafts and loans. The Board reviews the exposure to interest rate risk on a regular basis to reduce exposure to changes in interest rates.

Credit terms are offered to customers, with an average 30 days. These are subject to credit verification procedures, though the vast majority of the group's customers are major insurance companies that pay on average within 14 days. Provisions are made for doubtful debts where necessary, though risk is low.

Key performance indicators

The business retains a broad level of metrics that are based around monthly and annual targets, in addition to its longer-term strategic planning. These metrics are focussed on a broad level of areas, reflecting a balanced approach to people, financials, operational performance, the environment and client satisfaction.

The business operates with a data led approach that ensures that metrics are analysed and reported on throughout the business and managed in a manner that provides direction for positive actions where required.

Performance metrics have continued to remain strong through the financial year, which has ensured that there has been a stable foundation to further grow the business.

KARL VELLA AUTOBODY REPAIRS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 3 -
Future developments

The business operates annual and three year plans, with the latter focussed on continuing investment within the business and the next stage of growth. Current financial year results highlight further successes in performance, with levels of profitability in the business increasing at a similar rate to last year and client and people metrics industry leading.

The business is looking to expand its digital strategy further, while also starting to grow footprint and capacity in key areas.

 

On behalf of the board

Mr K B Vella MBE
Director
28 March 2025
KARL VELLA AUTOBODY REPAIRS LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 4 -

The director presents his annual report and financial statements for the year ended 30 June 2024.

Principal activities

The principal activity of the company continued to be that of the repair of accident damaged motor vehicles.

Results and dividends

The results for the year are set out on page 10.

No ordinary dividends were paid. The director does not recommend payment of a final dividend.

Director

The director who held office during the year and up to the date of signature of the financial statements was as follows:

Mr K B Vella MBE
Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

 

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.

 

There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.

Auditor

The auditor, MHA, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Strategic report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of financial risk management and future developments.

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.

KARL VELLA AUTOBODY REPAIRS LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 5 -
On behalf of the board
Mr K B Vella MBE
Director
28 March 2025
KARL VELLA AUTOBODY REPAIRS LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2024
- 6 -

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:

 

 

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.

KARL VELLA AUTOBODY REPAIRS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF KARL VELLA AUTOBODY REPAIRS LIMITED
- 7 -
Opinion

We have audited the financial statements of Karl Vella Autobody Repairs Limited (the 'company') for the year ended 30 June 2024 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity 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:

Basis for opinion

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 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 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.

Other information

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.

KARL VELLA AUTOBODY REPAIRS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF KARL VELLA AUTOBODY REPAIRS LIMITED (CONTINUED)
- 8 -

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

 

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.

Matters on which we are required to report by exception

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:

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 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, is detailed below:

 

 

KARL VELLA AUTOBODY REPAIRS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF KARL VELLA AUTOBODY REPAIRS LIMITED (CONTINUED)
- 9 -

We identified the following areas as those most likely to have a material impact on the financial statements: Health and Safety; employment law (including the Working Time Directive) and compliance with the UK Companies Act.

Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognize the non-compliance.

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.

Use of our report

This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.

Virginia Cooper FCA
Senior Statutory Auditor
For and on behalf of MHA, Statutory Auditor
Preston, United Kingdom
28 March 2025
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313)
KARL VELLA AUTOBODY REPAIRS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2024
- 10 -
2024
2023
Notes
£
£
Turnover
3
38,147,841
33,751,798
Cost of sales
(27,584,036)
(25,151,214)
Gross profit
10,563,805
8,600,584
Administrative expenses
(8,808,117)
(7,544,619)
Other operating income
23,000
23,000
Operating profit
4
1,778,688
1,078,965
Interest payable and similar expenses
6
(63,618)
(44,449)
Profit before taxation
1,715,070
1,034,516
Tax on profit
7
(450,621)
(274,877)
Profit for the financial year
1,264,449
759,639

The profit and loss account has been prepared on the basis that all operations are continuing operations.

KARL VELLA AUTOBODY REPAIRS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
- 11 -
2024
2023
£
£
Profit for the year
1,264,449
759,639
Other comprehensive income
-
-
Total comprehensive income for the year
1,264,449
759,639
KARL VELLA AUTOBODY REPAIRS LIMITED
BALANCE SHEET
AS AT
30 JUNE 2024
30 June 2024
- 12 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
8
4,557,747
4,716,258
Current assets
Stocks
9
1,000,925
828,190
Debtors
10
4,596,507
2,167,355
Cash at bank and in hand
7,583
1,218,902
5,605,015
4,214,447
Creditors: amounts falling due within one year
11
(4,756,164)
(4,503,624)
Net current assets/(liabilities)
848,851
(289,177)
Total assets less current liabilities
5,406,598
4,427,081
Creditors: amounts falling due after more than one year
12
(462,250)
(791,939)
Provisions for liabilities
Deferred tax liability
15
794,779
750,022
(794,779)
(750,022)
Net assets
4,149,569
2,885,120
Capital and reserves
Called up share capital
17
100
100
Revaluation reserve
360,155
360,155
Profit and loss reserves
3,789,314
2,524,865
Total equity
4,149,569
2,885,120

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 28 March 2025
Mr K B Vella MBE
Director
Company registration number 02921629 (England and Wales)
KARL VELLA AUTOBODY REPAIRS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
- 13 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 July 2022
100
360,155
1,765,226
2,125,481
Year ended 30 June 2023:
Profit and total comprehensive income
-
-
759,639
759,639
Balance at 30 June 2023
100
360,155
2,524,865
2,885,120
Year ended 30 June 2024:
Profit and total comprehensive income
-
-
1,264,449
1,264,449
Balance at 30 June 2024
100
360,155
3,789,314
4,149,569
KARL VELLA AUTOBODY REPAIRS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
- 14 -
1
Accounting policies
Company information

Karl Vella Autobody Repairs Limited is a private company limited by shares incorporated in England and Wales. The registered office is Gillibrands Road, Skelmersdale, WN8 9TA.

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 leasehold properties . The principal accounting policies adopted are set out below.

 

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 each category of financial instrument; 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 33 ‘Related Party Disclosures’: Compensation for key management personnel.

 

The financial statements of the company are consolidated in the financial statements of Karl Vella Group Limited. These consolidated financial statements are available from Companies House, Crown Way, Cardiff, CF14 3UZ.

1.2
Going concern

At the time of approving the financial statements, the business has prepared detailed forecasts for the following 24 months. The Directors have concluded that there is a very reasonable expectation that the business has sufficient resources to support its operations for the foreseeable future.true

The Directors and management team are very mindful of the ongoing challenges in the UK and wider economy, and the automotive repair industry, and approaches all strategic planning accordingly.

There is a high level of confidence that the business will continue to grow from strength to strength and continue the recent pace of growth and development, while maintaining a competitive level of profitability.

 

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.

KARL VELLA AUTOBODY REPAIRS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 15 -
1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Long leasehold land and buildings
2-10% straight line basis
Leasehold improvements
5-10% straight line basis
Plant and equipment
5-33% straight line basis
Fixtures and fittings
5-50% straight line basis
Office equipment
5-350% straight line basis
Motor vehicles
10% straight line basis

Assets in the course of construction are not depreciated.

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.

1.5
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.

KARL VELLA AUTOBODY REPAIRS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 16 -

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 at bank and in hand

Cash at bank and in hand are basic financial assets and include cash in hand, deposits held at call with banks 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.

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

All of the company's assets are basic financial assets.

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.

KARL VELLA AUTOBODY REPAIRS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 17 -
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 and loans from fellow group companies 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.

1.9
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.

KARL VELLA AUTOBODY REPAIRS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 18 -
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.

Where tax losses are transferred to another group company compensation is paid by that company at a rate commensurate with the tax benefit obtained.

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

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.

KARL VELLA AUTOBODY REPAIRS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 19 -
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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Going Concern

As indicated in note 1.2 it is the director's assessment that the company continues to be a going concern. Accordingly assets and liabilities have been valued on the basis that the group will continue in business. If this presumption is proven to be mistaken the carrying value of assets and liabilities would need to be reappraised to reflect the impact of cessation.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Useful lives of land and buildings

The company depreciates tangible assets over their estimated useful lives. The estimation of useful lives of assets is based on expectations about future use as well as historic performance and therefore requires management to make some estimates based on assumptions.

 

The actual lives of assets, specifically buildings, can vary significantly due to external environmental factors and dilapidation, as well as the effect of regular maintenance.

3
Turnover
2024
2023
£
£
Turnover analysed by class of business
Motor vehicle repairs
38,147,841
33,751,798
2024
2023
£
£
Turnover analysed by geographical market
UK
38,147,841
33,751,798
KARL VELLA AUTOBODY REPAIRS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 20 -
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
51,600
24,480
Depreciation of owned tangible fixed assets
299,042
275,949
Depreciation of tangible fixed assets held under finance leases
140,771
136,440
(Profit)/loss on disposal of tangible fixed assets
-
1,349
Operating lease charges
1,635,917
1,589,730
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2024
2023
Number
Number
Production
256
245
Administration and support
15
17
Total
271
262

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
8,653,755
7,678,111
Social security costs
851,013
739,407
Pension costs
181,699
157,578
9,686,467
8,575,096
6
Interest payable and similar expenses
2024
2023
£
£
Interest on finance leases and hire purchase contracts
63,618
44,449
7
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
405,864
-
0
KARL VELLA AUTOBODY REPAIRS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
7
Taxation
2024
2023
£
£
(Continued)
- 21 -
Deferred tax
Origination and reversal of timing differences
44,757
274,877
Total tax charge
450,621
274,877

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
1,715,070
1,034,516
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 20.50%)
428,768
212,076
Tax effect of expenses that are not deductible in determining taxable profit
17,133
14,317
Effect of change in corporation tax rate
-
0
49,535
Deferred tax adjustments in respect of prior years
4,720
(444)
Super deduction
-
0
(607)
Taxation charge for the year
450,621
274,877
KARL VELLA AUTOBODY REPAIRS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 22 -
8
Tangible fixed assets
Long leasehold land and buildings
Leasehold improvements
Plant and equipment
Fixtures and fittings
Office equipment
Motor vehicles
Total
£
£
£
£
£
£
£
Cost or valuation
At 1 July 2023
700,000
422,747
3,632,530
1,731,246
455,793
1,251,213
8,193,529
Additions
-
0
67,025
98,353
111,473
26,817
-
0
303,668
Disposals
-
0
-
0
-
0
-
0
-
0
(31,208)
(31,208)
At 30 June 2024
700,000
489,772
3,730,883
1,842,719
482,610
1,220,005
8,465,989
Depreciation and impairment
At 1 July 2023
19,069
79,901
1,912,649
579,975
360,431
525,246
3,477,271
Depreciation charged in the year
19,069
21,441
179,975
103,517
30,473
85,338
439,813
Eliminated in respect of disposals
-
0
-
0
-
0
-
0
-
0
(8,842)
(8,842)
At 30 June 2024
38,138
101,342
2,092,624
683,492
390,904
601,742
3,908,242
Carrying amount
At 30 June 2024
661,862
388,430
1,638,259
1,159,227
91,706
618,263
4,557,747
At 30 June 2023
680,931
342,846
1,719,881
1,151,271
95,362
725,967
4,716,258
KARL VELLA AUTOBODY REPAIRS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 23 -

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
759,605
830,070
Fixtures and fittings
144,156
157,566
Motor vehicles
413,321
492,649
Office equipment
17,385
22,184
1,334,467
1,502,469

Land and buildings with a carrying amount of £700,000 were revalued at 30 June 2022 by Peter E Gilkes & Company independent valuers not connected with the company on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties.

Land and buildings are carried at valuation. If land and buildings were measured using the cost model, the carrying amounts would have been approximately:

Leasehold property
2024
2023
£
£
Cost
854,463
854,463
Accumulated depreciation
(552,732)
(533,685)
Carrying value
301,731
320,778
9
Stocks
2024
2023
£
£
Work in progress
805,434
644,990
Finished goods and goods for resale
195,491
183,200
1,000,925
828,190
KARL VELLA AUTOBODY REPAIRS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 24 -
10
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,473,416
1,466,408
Corporation tax recoverable
-
0
53
Amounts owed by group undertakings
2,503,545
29,156
Other debtors
1,964
11,585
Prepayments and accrued income
617,582
660,153
4,596,507
2,167,355
11
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
13
500,073
-
0
Obligations under finance leases
14
289,896
383,003
Trade creditors
2,501,862
2,232,117
Amounts owed to group undertakings
-
0
474,002
Corporation tax
233,289
-
0
Other taxation and social security
498,369
587,757
Other creditors
40,583
49,290
Accruals and deferred income
692,092
777,455
4,756,164
4,503,624

Creditors falling due within one year totalling £289,896 (2023: £383,003) are secured over the assets to which they relate.

 

The following charges are secured over the assets of the company:

 

An inter company guarantee.

 

A mortgage debenture incorporating a fixed and floating charge over all the current and future assets of the company.

 

A legal charge on the leasehold land and buildings of the following:

South West side of Gillibrands Road, Skelmersdale

12
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under finance leases
14
462,250
791,939

Creditors falling due over one year totalling £462,250 (2023: £791,939) are secured over the assets to which they relate.

KARL VELLA AUTOBODY REPAIRS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 25 -
13
Loans and overdrafts
2024
2023
£
£
Bank overdrafts
500,073
-
0
Payable within one year
500,073
-
0

The bank overdraft is secured by an intercompany guarantee and a mortgage debenture as described in Note 11.

14
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
289,896
383,003
In two to five years
462,250
791,939
752,146
1,174,942

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 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

15
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
794,779
816,597
Tax losses
-
(72,602)
Structural & Buildings Allowance
-
6,027
794,779
750,022
KARL VELLA AUTOBODY REPAIRS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
15
Deferred taxation
(Continued)
- 26 -
2024
Movements in the year:
£
Liability at 1 July 2023
750,022
Charge to profit or loss
44,757
Liability at 30 June 2024
794,779

The deferred tax liability set out above is expected to reverse and relates primarily to accelerated capital allowances that are expected to mature.

16
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
181,699
157,578

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.

17
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
18
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
831,802
819,056
Between two and five years
2,624,998
2,619,091
In over five years
3,030,190
3,645,469
6,486,990
7,083,616
19
Related party transactions
Transactions with related parties

The company paid rent of £85,676, and vehicle hire of £27,150 to Karl Vella Limited, a company controlled by Karl Vella,

KARL VELLA AUTOBODY REPAIRS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
19
Related party transactions
(Continued)
- 27 -

The company has taken advantage of the exemption permitted under Section 33 'Related Party Disclosures' paragraph 33.1A from disclosing transactions with the parent company and other 100% fellow subsidiary companies.

20
Ultimate controlling party

The company's immediate parent is Karl Vella Group Limited, incorporated in England and Wales.

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