Company registration number SC267509 (Scotland)
STUART NICOL TRANSPORT LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
STUART NICOL TRANSPORT LIMITED
COMPANY INFORMATION
Directors
Mr S A Nicol
Mr D S McIntyre
Secretary
Ms C A Nobbs
Company number
SC267509
Registered office
High Street Industrial Estate
Shotts
Lanarkshire
United Kingdom
ML7 5DR
Auditor
Azets Audit Services
Titanium 1
King's Inch Place
Renfrew
Renfrewshire
United Kingdom
PA4 8WF
STUART NICOL TRANSPORT LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 25
STUART NICOL TRANSPORT LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 1 -
The directors present the strategic report for the year ended 31 December 2021.
Fair review of the business
Stuart Nicol Transport Limited is an independent haulage contractor providing professional haulage, distribution and warehousing services and solutions throughout the UK and to Europe.
Our strategy remains one of organic growth that we will achieve through relationships with Customers to maximise our mutual business opportunities. We will continue to focus on being leaders in our sector, requiring continual innovation built around providing customers with quality service that is flexible and cost effective.
We measure our success through complete customer satisfaction which we manage through key performance indicators.
Our corporate strategy has the fundamental support of a clearly defined Health and Safety Policy that lies at the heart of our operations.
The Directors of the Business will continue to review their impact on the environment and continue to reduce this where reasonably practicable.
The directors regard turnover, gross and operating margins as the key financial performance indicators of the business.
2021 was a year of much change across the Business with revenue and margins fluctuating across the year. Despite an increase in revenue, overall turnover levels remained below those seen pre-pandemic with the Scottish Transport sector continuing to be extremely price sensitive and competitive.
In Q4, the company fell behind projections in margins due to the panic buying of fuel across the country and its associated rising price. This was compounded further by general economic and inflationary pressures alongside the time lag of being able to pass on price increases quickly enough to customers. Overall this resulted in a decrease to the margins achieved in the year compared to 2020.
Nevertheless, the Business has performed well under the circumstances and the directors are happy with the results especially in face of the above challenges.
At the year end the company continued to maintain a strong balance sheet with net assets amounting to £3.21m (2020 - £3.02m).
STUART NICOL TRANSPORT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
Principal risks and uncertainties
The company is exposed to market risks arising from its operations. The directors have policies in place to ensure such risks are managed.
Credit and forex risk
The company provides services on credit to its customers. The risk arises from the possibility that customers will fail to meet their obligations to pay the sums due. To manage this risk all customers have their credit worthiness assessed and credit given is monitored by the company's administrative staff to ensure that payments are received and late payments are pursued. The company trades predominately with UK companies and is thus subject to minimal forex risk.
Liquidity risk
The company is funded by retained profits, director's loans, hire purchase contracts and by an invoice discounting facility. The company's policy is to ensure that any projected borrowing requirements are covered by committed facilities with its bankers. No treasury transactions of derivatives are entered into.
Other risks and uncertainties
There are unprecedented challenges presently in the economy with rising fuel costs, labour shortages and wage inflation to name a few. The cumulative effect of the impact of Brexit, the pandemic and current geo-political matters are largely driving such issues.
The directors meet regularly to consider the principal risks and uncertainties and believe that our structure and experienced and skilled workforce leave us in a strong position to meet these challenges.
Health and safety
Our strategy has the fundamental support of a clearly defined Health and Safety Policy that lies at the core of our operations. The directors apply and monitor a continuous improvement philosophy to Risk, Health and Safety and our impact on the Environment.
Development and performance
The Company has maintain its overall financial performance despite the challenges detailed above. The directors consider that 2022 will prove to be another challenging year but believe that the company is well placed and agile enough to react to changes in the sector.
Fixed asset investment
The directors continue to invest in a modern haulage fleet to ensure that running costs are controlled and the vehicles are fuel efficient.
Mr D S McIntyre
Director
31 August 2022
STUART NICOL TRANSPORT LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2021.
Principal activities
The principal activity of the company continued to be that of a haulage contractor.
Results and dividends
The results for the year are shown in the strategic report.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr S A Nicol
Mr D S McIntyre
Auditor
The auditor, Azets Audit Services, 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 instruments and associated risks.
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.
On behalf of the board
Mr D S McIntyre
Director
31 August 2022
STUART NICOL TRANSPORT LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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.
STUART NICOL TRANSPORT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF STUART NICOL TRANSPORT LIMITED
- 5 -
Opinion
We have audited the financial statements of Stuart Nicol Transport Limited (the 'company') for the year ended 31 December 2021 which comprise the profit and loss account, 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 December 2021 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
STUART NICOL TRANSPORT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF STUART NICOL TRANSPORT LIMITED
- 6 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
STUART NICOL TRANSPORT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF STUART NICOL TRANSPORT LIMITED
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
This report is made solely to the company's 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.
Alan Brown (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
2 September 2022
Chartered Accountants
Statutory Auditor
Titanium 1
King's Inch Place
Renfrew
Renfrewshire
United Kingdom
PA4 8WF
STUART NICOL TRANSPORT LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 8 -
2021
2020
Notes
£
£
Turnover
3
12,710,903
12,501,305
Cost of sales
(10,880,549)
(10,346,614)
Gross profit
1,830,354
2,154,691
Administrative expenses
(1,513,381)
(1,761,321)
Other operating income
51,474
12,605
Operating profit
4
368,447
405,975
Interest payable and similar expenses
7
(32,905)
(26,374)
Profit before taxation
335,542
379,601
Tax on profit
8
(149,008)
(83,356)
Profit for the financial year
186,534
296,245
The profit and loss account has been prepared on the basis that all operations are continuing operations.
STUART NICOL TRANSPORT LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
- 9 -
2021
2020
£
£
Profit for the year
186,534
296,245
Other comprehensive income
-
-
Total comprehensive income for the year
186,534
296,245
STUART NICOL TRANSPORT LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2021
31 December 2021
- 10 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
9
3,605,771
3,467,021
Current assets
Stocks
10
23,990
17,875
Debtors
11
2,538,378
2,542,727
Cash at bank and in hand
291,825
575,616
2,854,193
3,136,218
Creditors: amounts falling due within one year
12
(2,116,269)
(2,611,548)
Net current assets
737,924
524,670
Total assets less current liabilities
4,343,695
3,991,691
Creditors: amounts falling due after more than one year
13
(777,304)
(760,842)
Provisions for liabilities
Deferred tax liability
16
358,761
209,753
(358,761)
(209,753)
Net assets
3,207,630
3,021,096
Capital and reserves
Called up share capital
18
10,000
10,000
Profit and loss reserves
3,197,630
3,011,096
Total equity
3,207,630
3,021,096
The financial statements were approved by the board of directors and authorised for issue on 31 August 2022 and are signed on its behalf by:
Mr D S McIntyre
Director
Company Registration No. SC267509
STUART NICOL TRANSPORT LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2020
10,000
2,714,851
2,724,851
Year ended 31 December 2020:
Profit and total comprehensive income for the year
-
296,245
296,245
Balance at 31 December 2020
10,000
3,011,096
3,021,096
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
186,534
186,534
Balance at 31 December 2021
10,000
3,197,630
3,207,630
STUART NICOL TRANSPORT LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 12 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
23
552,905
1,695,664
Interest paid
(32,905)
(26,374)
Net cash inflow from operating activities
520,000
1,669,290
Investing activities
Purchase of tangible fixed assets
(225,974)
(206,244)
Proceeds on disposal of tangible fixed assets
291,601
174,350
Net cash generated from/(used in) investing activities
65,627
(31,894)
Financing activities
Repayment of borrowings
(182,992)
(36,000)
Payment of finance leases obligations
(686,426)
(538,133)
Net cash used in financing activities
(869,418)
(574,133)
Net (decrease)/increase in cash and cash equivalents
(283,791)
1,063,263
Cash and cash equivalents at beginning of year
575,616
(487,647)
Cash and cash equivalents at end of year
291,825
575,616
STUART NICOL TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 13 -
1
Accounting policies
Company information
Stuart Nicol Transport Limited is a private company limited by shares incorporated in Scotland. The registered office is High Street Industrial Estate, Shotts, Lanarkshire, United Kingdom, ML7 5DR.
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. The principal accounting policies adopted are set out below.
1.2
Going concern
The directors are required to prepare the statutory financial statements on the going concern basis unless it istrue inappropriate to presume that the company will continue in business.
In satisfaction of this responsibility the directors have considered the company's ability to meet its liabilities as they fall due. This assessment considers the company's principal risks and is dependent on a number of factors including financial performance and access to funding facilities.
The current and future financial position of the company, including its cash flow and liquidity, has been reviewed by the directors. The company meets its day to day working capital requirements through existing invoice discounting facilities and a loan from its owner, and director, Mr S Nicol.
Mr Nicol has provided assurances to the company that he will not demand repayment of his loan until such time that the company has the ability and funds available to repay it.
Following their review, the directors are confident that the existing funding facilities and support will provide sufficient headroom to meet the forecast cash requirements of the business. As such, the directors consider that it is appropriate to prepare the financial statements on a going concern basis.
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.
Revenue in respect of haulage services is recognised when deliveries are made, 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.
STUART NICOL TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 14 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and equipment
15% RB method
Fixtures and fittings
25% RB method
Computers
25% RB method
Motor vehicles & trailers
25% RB method for Motor vehicles and 15% RB method for Trailers
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.
During the year the company reclassified Trailers held within Plant & machinery to Motor Vehicles to provide more relevant information to the users of the financial statements with regards to the classes of fixed assets held.
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.
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.
STUART NICOL TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 15 -
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.
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.
STUART NICOL TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 16 -
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
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.
STUART NICOL TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 17 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
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.
1.14
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.
STUART NICOL TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 18 -
1.15
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 directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The director is of the opinion that there are no matters of significant judgement and estimation which are material to the financial statements.
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.
Tangible assets
The annual depreciation charge for tangible assets is sensitive to changes in the useful economic lives of the assets. The useful economic lives are assessed annually and amended when necessary to reflect judgement, based on technological advancements, future investments, economic utilisation and physical condition of the assets.
The directors reviewed the estimated useful lives of its fleet of Motor vehicles and trailers during the year which resulted in a reduction of £149,045 to depreciation charged.
3
Turnover and other revenue
2021
2020
£
£
Turnover analysed by class of business
Haulage contract sales
12,710,903
12,501,305
2021
2020
£
£
Other revenue
Grants received
12,605
Other income
51,474
-
STUART NICOL TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 19 -
4
Operating profit
2021
2020
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
7,025
12,557
Government grants
(12,605)
Fees payable to the company's auditor for the audit of the company's financial statements
15,500
14,000
Depreciation of owned tangible fixed assets
258,547
453,193
Depreciation of tangible fixed assets held under finance leases
426,092
499,426
(Profit)/loss on disposal of tangible fixed assets
(89,094)
46,805
Operating lease charges
51,918
38,615
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Drivers and garage staff
86
87
Management and administrative staff
20
20
Total
106
107
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
3,481,482
3,192,441
Social security costs
319,334
285,242
Pension costs
60,665
57,799
3,861,481
3,535,482
6
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
81,392
71,741
Company pension contributions to defined contribution schemes
2,279
1,819
83,671
73,560
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2020 - 2).
STUART NICOL TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 20 -
7
Interest payable and similar expenses
2021
2020
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
32,905
26,374
8
Taxation
2021
2020
£
£
Deferred tax
Origination and reversal of timing differences
149,292
86,861
Adjustment in respect of prior periods
(284)
(3,505)
Total deferred tax
149,008
83,356
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:
2021
2020
£
£
Profit before taxation
335,542
379,601
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
63,753
72,124
Tax effect of expenses that are not deductible in determining taxable profit
81
Other non-reversing timing differences
(645)
Adjustment in respect of prior years
(284)
(3,505)
Re-measurement of deferred tax rates
86,103
14,737
Taxation charge for the year
149,008
83,356
STUART NICOL TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 21 -
9
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles & trailers
Total
£
£
£
£
£
Cost
At 1 January 2021
2,293,875
52,143
25,294
6,275,895
8,647,207
Additions
85,672
8,699
3,189
928,336
1,025,896
Disposals
(333,913)
(8,941)
(530,623)
(873,477)
Transfers
(1,997,444)
1,997,444
At 31 December 2021
48,190
51,901
28,483
8,671,052
8,799,626
Depreciation and impairment
At 1 January 2021
1,440,920
23,911
18,927
3,696,428
5,180,186
Depreciation charged in the year
131,154
8,544
2,037
542,904
684,639
Eliminated in respect of disposals
(262,502)
(4,682)
(403,786)
(670,970)
Transfers
(1,294,331)
1,294,331
At 31 December 2021
15,241
27,773
20,964
5,129,877
5,193,855
Carrying amount
At 31 December 2021
32,949
24,128
7,519
3,541,175
3,605,771
At 31 December 2020
852,955
28,232
6,367
2,579,467
3,467,021
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2021
2020
£
£
Motor vehicles & trailers
1,939,798
1,808,772
10
Stocks
2021
2020
£
£
Raw materials and consumables
23,990
17,875
STUART NICOL TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 22 -
11
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
2,444,700
2,415,958
Corporation tax recoverable
45,425
45,425
Prepayments and accrued income
48,253
81,344
2,538,378
2,542,727
At the year end £1,902,454 of trade debtors (2020 - £1,858,030) were subject to invoice finance arrangements.
12
Creditors: amounts falling due within one year
2021
2020
Notes
£
£
Obligations under finance leases
14
644,897
547,863
Trade creditors
508,472
859,655
Taxation and social security
321,211
421,639
Other creditors
539,597
689,257
Accruals and deferred income
102,092
93,134
2,116,269
2,611,548
13
Creditors: amounts falling due after more than one year
2021
2020
Notes
£
£
Obligations under finance leases
14
777,304
760,842
14
Finance lease obligations
2021
2020
Future minimum lease payments due under finance leases:
£
£
Within one year
644,897
547,863
In two to five years
777,304
760,842
1,422,201
1,308,705
Finance lease payments represent rentals payable by the company for certain items of plant and machinery and motor vehicles. 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 between 3 and 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
STUART NICOL TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 23 -
15
Borrowings
Any invoice finance liability arising is secured over the related debts and a floating charge over the other assets of the company. Lease liabilities are secured over the fixed assets to which they relate.
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2021
2020
Balances:
£
£
Accelerated capital allowances
477,675
243,261
Tax losses
(118,659)
(33,302)
Other short term
(255)
(206)
358,761
209,753
2021
Movements in the year:
£
Liability at 1 January 2021
209,753
Charge to profit or loss
149,008
Liability at 31 December 2021
358,761
The Finance Bill 2021 was substantively enacted on 24 May 2021 changing the main rate of corporation tax from 19% to 25% after 1 April 2023. The closing deferred tax asset has been measured in accordance with the rate substantively enacted at the Balance Sheet date that would be expected to apply on reversal of the timing differences.
17
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
60,665
57,799
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
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
10,000
10,000
10,000
10,000
STUART NICOL TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 24 -
19
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:
2021
2020
£
£
Within one year
52,000
44,000
Between two and five years
208,000
208,000
In over five years
221,000
273,000
481,000
525,000
20
Events after the reporting date
Subsequent to the year end, the company purchased land for consideration amounting to £420,000 excluding direct costs of acquisition and sold some land for consideration amounting £50,000.
21
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2021
2020
£
£
Aggregate compensation
81,392
71,741
Transactions with related parties
During the year the company entered into the following transactions with related parties:
At the year end, the company owed the director, Mr S Nicol, £448,783 (2020 - £631,775). During the year the director was repaid £182,992 (2020 - £36,000). This loan is unsecured and interest free and repayable on demand.
22
Ultimate controlling party
The company is under the control of the director, Mr S Nicol, by virtue of his 100% shareholding in the company.
STUART NICOL TRANSPORT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 25 -
23
Cash generated from operations
2021
2020
£
£
Profit for the year after tax
186,534
296,245
Adjustments for:
Taxation charged
149,008
83,356
Finance costs
32,905
26,374
(Gain)/loss on disposal of tangible fixed assets
(89,094)
46,805
Depreciation and impairment of tangible fixed assets
684,639
952,619
Movements in working capital:
(Increase)/decrease in stocks
(6,115)
639
Decrease/(increase) in debtors
4,349
(16,613)
(Decrease)/increase in creditors
(409,321)
306,239
Cash generated from operations
552,905
1,695,664
24
Analysis of changes in net debt
1 January 2021
Cash flows
New finance leases
31 December 2021
£
£
£
£
Cash at bank and in hand
575,616
(283,791)
-
291,825
Obligations under finance leases
(1,308,705)
686,426
(799,922)
(1,422,201)
(733,089)
402,635
(799,922)
(1,130,376)
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