In order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the financial statements of Smile Cars Limited for the year ended 31 December 2024 which comprise, the statement of financial position and the related notes from the company’s accounting records and from information and explanations you have given us.

As a practising member firm of the Institute of Chartered Accountants in England and Wales (ICAEW), we are subject to its ethical and other professional requirements which are detailed at https://www.icaew.com/regulation.

This report is made solely to the board of directors of Smile Cars Limited, as a body, in accordance with the terms of our engagement letter dated 25 September 2023. Our work has been undertaken solely to prepare for your approval the financial statements of Smile Cars Limited and state those matters that we have agreed to state to the board of directors of Smile Cars Limited, as a body, in this report in accordance with ICAEW Technical Release 07/16 AAF. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Smile Cars Limited and its board of directors as a body, for our work or for this report.

It is your duty to ensure that Smile Cars Limited has kept adequate accounting records and to prepare statutory financial statements that give a true and fair view of the assets, liabilities, financial position and profit of Smile Cars Limited. You consider that Smile Cars Limited is exempt from the statutory audit requirement for the year.

We have not been instructed to carry out an audit or a review of the financial statements of Smile Cars Limited. For this reason, we have not verified the accuracy or completeness of the accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the statutory financial statements.

The directors of the company have elected not to include a copy of the income statement within the financial statements.true

For the financial year ended 31 December 2024 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

Smile Cars Limited is a private company limited by shares incorporated in England and Wales. The registered office is Amelia House, Crescent Road, Worthing, West Sussex, BN11 1RL.

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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

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 £1.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The directors have considered relevant information, including the company’s principal risks and uncertainties, the annual budget, forecast future cash flows and the impact of subsequent events in making their assessment.  Based on these assessments and having regard to the resources available to the entity, the directors have concluded that there is no material uncertainty and that they can continue to adopt the going concern basis in preparing the annual report and financial statements.

Revenue is recognised at the fair value of the consideration received or receivable for vehicles sold during the period in the normal course of business including commissions, and is shown exclusive of VAT and other sales related taxes. Vehicle sales and related costs are recognised when the company has fulfilled all of its obligations under the sale contract.

Inventories are stated at the lower of cost and estimated selling price less costs to complete and sell.

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

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.

Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost.

Basic financial liabilities, including trade and other payables 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.

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.

The tax expense represents the sum of the tax currently payable.

The tax currently payable is based on taxable profit for the year.

Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease.

The average monthly number of persons (including directors) employed by the company during the year was 4 (2023 - 4).

Stocking loans of £390,000 (2023 - £390,000) included in other payables are secured on the vehicles inventory.

The company has a bank loan under the UK Government-backed Bounce Back Loan Scheme (“BBLS”). The loan is subject to interest charges at a fixed rate of 2.5% per annum, with the Government providing a Business Interruption payment to cover the first 12 months of interest payments. The Government has also provided a guarantee for the full amount of the loan.

Dividends totalling £40,000 (2023 - £50,000) were paid in the year in respect of shares held by the company's directors.

Included within other payables are directors' loan balances which total £8,758 (2023 - £5,133). Included within other receivables are directors' loan balances which total £9,034 (2023 - £10,784). No interest is charged on these balances.