REGISTERED NUMBER: 00462543 (England and Wales)

Acorn Group Limited

Strategic Report, Report of the Directors and

Financial Statements

for the Year Ended 31 December 2017

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

4

Income Statement

6

Other Comprehensive Income

7

Balance Sheet

8

Statement of Changes in Equity

9

Notes to the Financial Statements

10

DIRECTORS:

A J D Wilkinson

J Abnett

D C Larkin

M Sparkes

REGISTERED OFFICE:

Cannock Road

Chase Terrace

Burntwood

Staffordshire

WS7 1JS

REGISTERED NUMBER:

00462543 (England and Wales)

AUDITORS:

Haines Watts

Sterling House

97 Lichfield Street

Tamworth

Staffordshire

B79 7QF

BANKERS:

Barclays Bank PLC

Barclays Business Centre

28 Lichfield Street

Tamworth

Staffordshire

The directors present their strategic report for the year ended 31 December 2017.

REVIEW OF BUSINESS

The Company recorded another very satisfactory year of progress with net profitability before tax higher by 31% on the

previous year, with all departments contributing positively.

Turnover as a whole was up on the previous year by 2.66%, at £23,672,817 with gross profit up by 19%, at £1,270,783.

The primary individual departments performed as follows:

2017

2016

Turnover

Basic Gross Profit

Turnover

Basic Gross Profit

Ford New

3,384,406

176,958

3,647,696

185,130

Kia New

5,370,893

322,480

4,860,375

359,966

Mitsubishi New

2,606,307

160,638

2,600,920

84,460

Used Cars

6,346,387

487,540

6,654,075

487,540

Service

967,462

729,164

730,581

606,080

Parts

1,048,522

280,059

972,402

234,354

Contract Hire

3,526,554

462,693

3,593,781

457,820

The principal risks within the Motor Industry, are the ongoing general uncertainty regarding the outcome of the Brexit

talks. However, upcoming New Models from all our Franchise partners, will help to alleviate any slowdown. After Sales

Departments have performed well during 2017 and are expected to exceed that performance in 2018. Overall, the

Company is looking to better the 2017 results.

ON BEHALF OF THE BOARD:

J Abnett - Director

3 September 2018

The directors present their report with the financial statements of the company for the year ended 31 December 2017.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of the sale and servicing of new and used

vehicles and that of contract hire.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2017.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2017 to the date of this report.

A J D Wilkinson

J Abnett

D C Larkin

Other changes in directors holding office are as follows:

M Sparkes - appointed 1 January 2017

DIRECTORS' RESPONSIBILITIES STATEMENT

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements

in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors

have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting

Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not

approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the

company and of the profit or loss of the company for that period. In preparing these financial statements, the directors

are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the

company's transactions and disclose with reasonable accuracy at any time the financial position of the company and

enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for

safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud

and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act

2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have

taken as a director in order to make himself aware of any relevant audit information and to establish that the company's

auditors are aware of that information.

AUDITORS

The auditors, Haines Watts, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

J Abnett - Director

3 September 2018

Opinion

We have audited the financial statements of Acorn Group Limited (the 'company') for the year ended 31 December 2017

which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity

and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting

framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards,

including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of

Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2017 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.

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 Auditors' 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to

you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic

Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors

thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of

assurance conclusion thereon.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. 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.

Opinion on other matters prescribed by the Companies Act 2006

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

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

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 Report of the Directors.

We have nothing to report in respect of the following matters where 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 directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Directors' Responsibilities Statement set out on page three, the directors are responsible

for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such

internal control as the directors determine necessary to enable the preparation of financial statements that are free from

material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a

going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of

accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic

alternative but to do so.

Auditors' 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 a Report of the Auditors that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with

ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic

decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting

Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our 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.

Haines Watts

Sterling House

97 Lichfield Street

Tamworth

Staffordshire

B79 7QF

3 September 2018

TURNOVER

3

23,672,817

23,059,831

Cost of sales

22,402,034

21,992,432

GROSS PROFIT

1,270,783

1,067,399

Administrative expenses

991,505

895,278

279,278

172,121

Other operating income

-

41,097

OPERATING PROFIT

5

279,278

213,218

Interest receivable and similar income

747

2,395

280,025

215,613

Interest payable and similar expenses

6

-

1,790

PROFIT BEFORE TAXATION

280,025

213,823

Tax on profit

7

(11,375

)

135,408

PROFIT FOR THE FINANCIAL YEAR

291,400

78,415

PROFIT FOR THE YEAR

291,400

78,415

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

291,400

78,415

FIXED ASSETS

Tangible assets

8

432,007

86,460

Investment property

9

-

165,000

432,007

251,460

CURRENT ASSETS

Stocks

10

2,358,941

2,359,079

Debtors

11

3,761,093

4,321,562

Cash at bank and in hand

532,872

254,557

6,652,906

6,935,198

CREDITORS

Amounts falling due within one year

12

3,529,309

3,737,885

NET CURRENT ASSETS

3,123,597

3,197,313

TOTAL ASSETS LESS CURRENT LIABILITIES

3,555,604

3,448,773

CREDITORS

Amounts falling due after more than one year

13

(839,766

)

(1,035,790

)

PROVISIONS FOR LIABILITIES

16

(29,357

)

(17,902

)

NET ASSETS

2,686,481

2,395,081

CAPITAL AND RESERVES

Called up share capital

17

196,704

196,704

Capital redemption reserve

18

5,044

5,044

Retained earnings

18

2,484,733

2,193,333

SHAREHOLDERS' FUNDS

2,686,481

2,395,081

The financial statements were approved by the Board of Directors on 3 September 2018 and were signed on its behalf by:

J Abnett - Director

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 January 2016

196,704

2,114,918

5,044

2,316,666

Changes in equity

Total comprehensive income

-

78,415

-

78,415

Balance at 31 December 2016

196,704

2,193,333

5,044

2,395,081

Changes in equity

Total comprehensive income

-

291,400

-

291,400

Balance at 31 December 2017

196,704

2,484,733

5,044

2,686,481

1.	STATUTORY INFORMATION

Acorn Group Limited is a private company, limited by shares , registered in England and Wales. The company's

registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemption in preparing these financial

statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of

Ireland":

•

the requirements of Section 7 Statement of Cash Flows.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates,

value added tax and other sales taxes.

Tangible fixed assets

Tangible fixed assets other than freehold land are stated at cost less depreciation. Depreciation is provided at

rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as

follows:

Land and buildings freehold

2% Straight line

Plant and machinery

50% Straight line

Fixtures, fittings & equipment

20%, 33%, 50% and 100% Straight line

Petrol pumps and storage tanks

20% Straight line on a monthly basis

Computer

50% Straight line on a monthly basis

Leasehold improvements

Straight line over the term of the lease

Investment property

Investment property is shown at most recent valuation. Any aggregate surplus or deficit arising from changes in

fair value is recognised in profit or loss.

Stocks

Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance

for obsolete and slow moving items.

Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in

bringing stocks to their present location and condition.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to

the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or

substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the

balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from

those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws

that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal

of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they

will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit and loss on a straight line basis over the period of the

lease.

Finance leases are leases under which the lessee is given the benefit of ownership of the assets which remain

the property of the lessor. Assets acquired by the company under such agreements have been capitalised and

the capital amounts outstanding on such agreements are included in creditors as net obligations under finance

lease and hire purchase contracts.

Where the company is the lessor, the assets are not included within fixed assets, as is normal practice but the

capital repayments receivable and the residual values of the vehicles are included as debtors.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension

scheme are charged to profit or loss in the period to which they relate.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2017

2016

£

£

United Kingdom

23,672,817

23,059,831

23,672,817

23,059,831

4.	EMPLOYEES AND DIRECTORS

2017

2016

£

£

Wages and salaries

1,341,353

1,223,897

Social security costs

124,812

112,359

Other pension costs

38,748

34,698

1,504,913

1,370,954

The average number of employees during the year was as follows:

2017

2016

Salesmen

11

11

Mechanics

12

10

Parts Department

4

5

Other

11

10

Administration

17

17

55

53

2017

2016

£

£

Directors' remuneration

236,887

163,274

Directors' pension contributions to money purchase schemes

28,894

26,603

Information regarding the highest paid director for the year ended 31 December 2017 is as follows:

2017

£

Emoluments etc

80,355

Pension contributions to money purchase schemes

12,677

5.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2017

2016

£

£

Other operating leases

111,439

105,369

Depreciation - owned assets

28,913

38,996

Profit on disposal of fixed assets

(62,283

)

-

Auditors' remuneration

9,275

9,250

During the year the turnover relating to vehicle leasing amounted to £1,754,777 (2016: £1,716,351).

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

2017

2016

£

£

Bank interest

-

1,790

7.

TAXATION

Analysis of the tax (credit)/charge

The tax (credit)/charge on the profit for the year was as follows:

2017

2016

£

£

Current tax:

UK corporation tax

82,228

132,787

Prior year adjustment

(105,058

)

-

Total current tax

(22,830

)

132,787

Deferred tax

11,455

2,621

Tax on profit

(11,375

)

135,408

UK corporation tax has been charged at 19.25% .

Reconciliation of total tax (credit)/charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is

explained below:

2017

2016

£

£

Profit before tax

280,025

213,823

Profit multiplied by the standard rate of corporation tax in the UK of 19.246% (2016 - 20%)

53,894

42,765

Effects of:

Expenses not deductible for tax purposes

52

-

Depreciation in excess of capital allowances

39,737

92,643

Adjustments to tax charge in respect of previous periods

(105,058

)

-

Total tax (credit)/charge

(11,375

)

135,408

8.	TANGIBLE FIXED ASSETS

Fixtures

Freehold

Plant and

and

property

machinery

fittings

Totals

£

£

£

£

COST

At 1 January 2017

67,595

94,425

496,139

658,159

Additions

358,654

11,756

4,050

374,460

At 31 December 2017

426,249

106,181

500,189

1,032,619

DEPRECIATION

At 1 January 2017

36,761

73,631

461,307

571,699

Charge for year

485

13,045

15,383

28,913

At 31 December 2017

37,246

86,676

476,690

600,612

NET BOOK VALUE

At 31 December 2017

389,003

19,505

23,499

432,007

At 31 December 2016

30,834

20,794

34,832

86,460

Included in cost of land and buildings is freehold land of £ 16,009 (2016 - £ 16,009 ) which is not depreciated.

The cost and accumulated depreciation of assets held under hire purchase contracts for the use of letting under

operating leases included in debtors is:

Motor

Vehicles

£

Cost

At 1 January 2017

4,977,931

At 31 December 2017

4,920,640

Additions

1,606,283

Disposals

1,663,574

Depreciation

At 1 January 2017

1,962,349

At 31 December 2017

2,079,974

Charge for the year

1,073,440

Eliminated on disposal

955,815

Assets included within tangible fixed assets subject to hire purchase contracts had a net book value of £2,840

(2016: £4,260) and depreciation of £1,420 (2016: £1,420) was charged during the year.

9.	INVESTMENT PROPERTY

Total

£

FAIR VALUE

At 1 January 2017

165,000

Disposals

(165,000

)

At 31 December 2017

-

NET BOOK VALUE

At 31 December 2017

-

At 31 December 2016

165,000

10.

STOCKS

2017

2016

£

£

Vehicles

2,316,246

2,311,344

Work in progress and other

stocks

3,078

2,160

Spare parts and accessories

39,617

45,575

2,358,941

2,359,079

Stock recognised in cost of sales during the year as an expense was £20,100,307 (2016: £20,101,161).