Company registration number 03872602 (England and Wales)
CRJ SERVICES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
CRJ SERVICES LIMITED
COMPANY INFORMATION
Directors
J L Carter
L B McQuaid
R H Symons
A Clarkson
(Appointed 25 January 2023)
Secretary
J L Carter
Company number
03872602
Registered office
Brook House Farm
London Road
Allostock
Knutsford
Cheshire
WA16 9LU
Auditor
Cowgill Holloway LLP
Regency House
45-53 Chorley New Road
Bolton
BL1 4QR
CRJ SERVICES LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 26
CRJ SERVICES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -
The directors present the strategic report for the year ended 31 March 2023.
Review of the business
CRJ Services hires and sells high quality machinery into the material processing and recycling industry. We mainly supply shredders, screeners and separators and also the associated parts to a wide range of customers throughout the UK and Ireland. We have purpose built workshops that repairs our own fleet and we also carry out third party repairs to customers machines.
We are passionate about playing our part in helping the UK and Ireland to recycle and over the years we have helped divert millions of tonnes of waste from landfill. We have built a reputation for quality, reliability and going the extra mile to ensure our customers operations run smoothly and this reputation is something we feel sets us apart from the rest of the industry.
In the year to March 2022 we acquired the exclusive dealership of Jenz GmbH. We are very pleased that we have been successful in growing this brand in the UK and it also allows us to enter the forestry market which could be a significant growth area in the future. Since the year ended March 2023 we have also acquired the exclusive dealership of Pronar, for the sale and hire of Trommel screens within the UK. Pronar has been under represented in the UK in the past and we are looking forward to growing this brand which again provides an area for significant growth.
The Directors are very pleased with the growth in profitability of the business. EBITDA reached £4.6m (2022: £3.2m) a growth of 43.8%. We invested a further £6.9m in additional assets and we will continually reinvest to maintain our hire fleet at an exceptional level of quality.
Our balance sheet continues to remain very strong at £7.5m (2022: £7.4m) which places the business in a stable position for the future.
Principal risks and uncertainties
The company uses various financial instruments including hire purchase, finance leases, trade credit and other creditors that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the company’s operations.
The existence of these financial instruments exposes the company to a number of financial risks, which are described in more detail below. The directors review and agree policies for managing these risks. These policies have remained unchanged from previous years.
Liquidity risk
The company seeks to manage financial risk by ensuring liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably.
Interest rate risk
The company finances its operations through a combination of retained profits, finance leases and hire purchase contracts. The company exposure to interest rate fluctuations on its borrowings is managed by the use of both fixed and floating facilities.
Foreign currency risk
The company’s principal foreign currency exposures arises from trading with overseas companies. Company policy permits but does not demand that these exposures may be hedged in order to fix the cost in sterling.
Credit risk
The principal credit risk arises from the company's trade debtors.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
CRJ SERVICES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
Principal risks and uncertainties (continued)
Economic risk
As a result of global economic factors, including both the recovery from Covid-19 and the Ukraine war, costs have generally increased in most areas, including fuel, energy and wages. These inflation related price increase are expected to remain for some time to come. Close monitoring of costs by the directors to budget are in place to mitigate the financial impact on on-going profitability.
Key performance indicators
J L Carter
Director
2 November 2023
CRJ SERVICES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 March 2023.
Principal activities
The principal activity of the company continued to be that of supply and hire of material processing and recycling machines.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £1,000,000. 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:
J L Carter
K H Jones
(Resigned 17 October 2022)
L B McQuaid
R H Symons
A Clarkson
(Appointed 25 January 2023)
Future developments
The directors will continue to monitor profit margins, utilisation of assets and sales growth in the forthcoming year. The company's growth strategy is based around strong customer partnerships and continued investment in its hire and parts business.
Auditor
The auditor, Cowgill Holloway LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
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.
CRJ SERVICES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 4 -
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
J L Carter
Director
2 November 2023
CRJ SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF CRJ SERVICES LIMITED
- 5 -
Opinion
We have audited the financial statements of CRJ Services Limited (the 'company') for the year ended 31 March 2023 which comprise 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:
give a true and fair view of the state of the company's affairs as at 31 March 2023 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.
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.
CRJ SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF CRJ SERVICES LIMITED
- 6 -
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.
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 extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussions with the directors (as required by auditing standards) and discussed with the directors the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation and taxation legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly, the company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: laws related to the hire and sale of machinery, employment, road transportation, health & safety and data protection.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and inspection of regulatory and legal correspondence, if any. Through these procedures we did not become aware of any actual or suspected non-compliance.
CRJ SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF CRJ SERVICES LIMITED
- 7 -
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
We design procedures in line with our responsibilities, outlined below to detect material misstatement due to fraud:
Matters are discussed amongst the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud
Identifying and assessing the design and effectiveness of controls that management have in place to prevent and detect fraud
Detecting and responding to the risks of fraud following discussions with management and enquiring as to whether management have knowledge of any actual, suspected or alleged fraud;
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's 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.
Caroline Snape
Senior Statutory Auditor
For and on behalf of Cowgill Holloway LLP
2 November 2023
Chartered Accountants
Statutory Auditor
Regency House
45-53 Chorley New Road
Bolton
BL1 4QR
CRJ SERVICES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 8 -
2023
2022
as restated
Notes
£
£
Turnover
3
24,911,578
18,512,592
Cost of sales
(20,015,393)
(15,082,478)
Gross profit
4,896,185
3,430,114
Administrative expenses
(3,103,965)
(2,435,184)
Other operating income
52,808
Operating profit
4
1,792,220
1,047,738
Interest receivable and similar income
7
431
Interest payable and similar expenses
8
(290,441)
(145,428)
Profit before taxation
1,501,779
902,741
Tax on profit
9
(349,980)
(450,051)
Profit for the financial year
1,151,799
452,690
The profit and loss account has been prepared on the basis that all operations are continuing operations.
CRJ SERVICES LIMITED
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
11
16,140
8,750
Tangible assets
12
15,163,325
11,966,315
15,179,465
11,975,065
Current assets
Stocks
13
3,981,189
3,685,432
Debtors
14
3,869,906
3,040,967
Cash at bank and in hand
3,089,257
2,792,005
10,940,352
9,518,404
Creditors: amounts falling due within one year
15
(10,035,291)
(8,032,298)
Net current assets
905,061
1,486,106
Total assets less current liabilities
16,084,526
13,461,171
Creditors: amounts falling due after more than one year
16
(7,289,093)
(4,999,684)
Provisions for liabilities
Deferred tax liability
18
1,284,370
1,102,223
(1,284,370)
(1,102,223)
Net assets
7,511,063
7,359,264
Capital and reserves
Called up share capital
20
200
200
Share premium account
19,600
19,600
Profit and loss reserves
7,491,263
7,339,464
Total equity
7,511,063
7,359,264
The financial statements were approved by the board of directors and authorised for issue on 2 November 2023 and are signed on its behalf by:
J L Carter
Director
Company Registration No. 03872602
CRJ SERVICES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 10 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2021
200
19,600
6,886,774
6,906,574
Year ended 31 March 2022:
Profit and total comprehensive income for the year
-
-
452,690
452,690
Balance at 31 March 2022
200
19,600
7,339,464
7,359,264
Year ended 31 March 2023:
Profit and total comprehensive income for the year
-
-
1,151,799
1,151,799
Dividends
10
-
-
(1,000,000)
(1,000,000)
Balance at 31 March 2023
200
19,600
7,491,263
7,511,063
CRJ SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 11 -
1
Accounting policies
Company information
CRJ Services Limited is a private company limited by shares incorporated in England and Wales. The registered office is Brook House Farm, London Road, Allostock, Knutsford, Cheshire, WA16 9LU.
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.
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 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
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’: Carrying amounts, 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 CRJ Services Holdings Ltd These consolidated financial statements are available from its registered office, Brook House Farm, London Road, Allostock, Knutsford, Cheshire, WA16 9LU.
1.2
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.
Turnover represents the value of equipment hire services provided to customers during the period, excluding value added tax.
Turnover from equipment sales, part sales and transport is recognised when goods have been delivered to customers such that the risks and rewards of ownership have transferred to them.
Turnover from equipment hire services is recognised upon completion of terms of hire based on the hourly usage of the equipment by the customer.
1.3
Intangible fixed assets other than goodwill
Amortisation 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:
Website
5 years straight line basis
CRJ SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 12 -
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold land and buildings
4% p.a. straight line basis
Plant and equipment
20% p.a. reducing balance basis
Fixtures and fittings
20% p.a. reducing balance basis
Computers
20% p.a. reducing balance basis
Motor vehicles
20% p.a. reducing balance 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.
On the disposal of an asset that was previously part of the company's hire fleet, and where the customer purchasing the asset was not the lessee of the asset during its use as part of the hire fleet, the carrying value of the asset will be charged to cost of sales and the sale proceeds will be credited to turnover.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks are valued using a first-in first-out costing basis.
CRJ SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 13 -
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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.
CRJ SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 14 -
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
CRJ SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
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.
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.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
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.
CRJ SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 16 -
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 fixed assets
The useful economic life of tangible fixed assets and residual values where applicable, are estimated by the directors of the company, to ensure and appropriate depreciation charge is recognised each year.
3
Turnover and other revenue
2023
2022
as restated
£
£
Turnover analysed by class of business
Plant hire sales
8,752,429
7,522,301
Machinery sales
11,598,235
7,731,533
Parts sales
3,990,826
2,798,080
Transport sales
570,088
460,678
24,911,578
18,512,592
2023
2022
as restated
£
£
Turnover analysed by geographical market
UK
23,726,017
18,064,434
Europe
1,167,845
441,718
Rest of World
17,716
6,440
24,911,578
18,512,592
2023
2022
£
£
Other revenue
Interest income
-
431
Grants received
-
1,558
CRJ SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 17 -
4
Operating profit
2023
2022
as restated
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
61,201
(58,023)
Government grants
-
(1,558)
Fees payable to the company's auditor for the audit of the company's financial statements
16,000
15,000
Depreciation of owned tangible fixed assets
718,765
748,677
Depreciation of tangible fixed assets held under finance leases
2,126,405
1,378,755
Loss on disposal of tangible fixed assets
7,849
263
Amortisation of intangible assets
2,848
-
Government grants received in 2022 related to claims made for the Coronavirus Job Retention Scheme.
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Production and engineering
38
33
Administration
11
9
Sales
10
9
Total
59
51
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,832,159
2,249,596
Social security costs
330,055
265,345
Pension costs
170,403
158,741
3,332,617
2,673,682
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
469,757
460,576
Company pension contributions to defined contribution schemes
123,632
122,642
593,389
583,218
CRJ SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
6
Directors' remuneration
(Continued)
- 18 -
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2022 - 3).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
199,893
183,152
Company pension contributions to defined contribution schemes
41,321
41,321
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
431
8
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
214
-
Other interest on financial liabilities
32,252
Interest on finance leases and hire purchase contracts
257,975
145,428
290,441
145,428
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
167,833
Deferred tax
Origination and reversal of timing differences
138,431
185,518
Changes in tax rates
43,716
264,533
Total deferred tax
182,147
450,051
Total tax charge
349,980
450,051
CRJ SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
9
Taxation
(Continued)
- 19 -
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:
2023
2022
£
£
Profit before taxation
1,501,779
902,741
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
285,338
171,521
Tax effect of expenses that are not deductible in determining taxable profit
29,188
594
Gains not taxable
(2,090)
Effect of change in corporation tax rate
43,716
264,533
Group relief
24,092
Permanent capital allowances in excess of depreciation
(7,144)
(10,689)
Depreciation on assets not qualifying for tax allowances
972
Taxation charge for the year
349,980
450,051
Deferred tax has been recognised at a rate of 25%. In October 2022, the government announced an increase in the corporation tax main rate from 19% to 25% for companies with profit over £250,000. There is a small company rate of 19% for taxable profits under £50,000 and marginal relief available for profits falling between £50,000 - £250,000 with effect from 1 April 2023.
10
Dividends
2023
2022
£
£
Interim paid
1,000,000
CRJ SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 20 -
11
Intangible fixed assets
Website
£
Cost
At 1 April 2022
8,750
Additions
10,238
At 31 March 2023
18,988
Amortisation and impairment
At 1 April 2022
Amortisation charged for the year
2,848
At 31 March 2023
2,848
Carrying amount
At 31 March 2023
16,140
At 31 March 2022
8,750
CRJ SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 21 -
12
Tangible fixed assets
Leasehold land and buildings
Assets under construction
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
£
Cost
At 1 April 2022
323,977
58,333
14,658,874
75,124
112,941
533,600
15,762,849
Additions
65,162
6,754,316
12,033
68,930
45,257
6,945,698
Disposals
(1,309,262)
(1,995)
(77,134)
(1,388,391)
Transfers
(58,333)
58,333
At 31 March 2023
389,139
20,162,261
87,157
179,876
501,723
21,320,156
Depreciation and impairment
At 1 April 2022
94,879
3,528,497
16,594
22,325
134,239
3,796,534
Depreciation charged in the year
14,143
2,714,986
14,212
23,709
78,120
2,845,170
Eliminated in respect of disposals
(458,088)
(26,785)
(484,873)
At 31 March 2023
109,022
5,785,395
30,806
46,034
185,574
6,156,831
Carrying amount
At 31 March 2023
280,117
14,376,866
56,351
133,842
316,149
15,163,325
At 31 March 2022
229,098
58,333
11,130,377
58,530
90,616
399,361
11,966,315
CRJ SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
12
Tangible fixed assets
(Continued)
- 22 -
Assets under the course of construction represent deposits paid on plant and machinery ordered before the year end.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Plant and equipment
11,531,615
8,713,589
Motor vehicles
57,652
117,931
11,589,267
8,831,520
13
Stocks
2023
2022
£
£
Work in progress
34,920
41,217
Finished goods and goods for resale
3,946,269
3,644,215
3,981,189
3,685,432
Stock with a carrying value of £49,909 (2022: £76,000) is held on a hire purchase agreement.
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
3,194,495
2,359,370
Other debtors
185,212
350
Prepayments and accrued income
490,199
681,247
3,869,906
3,040,967
CRJ SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 23 -
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
17
3,520,852
2,338,981
Trade creditors
3,347,330
2,555,473
Amounts owed to group undertakings
415,839
1,271,950
Corporation tax
167,833
Other taxation and social security
625,805
194,069
Other creditors
330,201
462,645
Accruals and deferred income
1,627,431
1,209,180
10,035,291
8,032,298
Obligations under finance leases are secured against the assets to which they relate.
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
17
7,289,093
4,999,684
Obligations under finance leases are secured against the assets to which they relate.
17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
3,520,852
2,338,981
In two to five years
7,289,093
4,999,684
10,809,945
7,338,665
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 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
CRJ SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 24 -
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
1,285,439
1,103,114
Retirement benefit obligations
(1,069)
(891)
1,284,370
1,102,223
2023
Movements in the year:
£
Liability at 1 April 2022
1,102,223
Charge to profit or loss
138,431
Effect of change in tax rate - profit or loss
43,716
Liability at 31 March 2023
1,284,370
The deferred tax liability relates to accelerated capital allowances that are expected to mature over the associated fixed asset life.
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
170,403
158,741
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.
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
200
200
200
200
CRJ SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 25 -
21
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sales
Sales
Purchases
Purchases
2023
2022
2023
2022
£
£
£
£
Other related parties
28,962
34,601
216,151
142,406
2023
2022
Amounts due to related parties
£
£
Other related parties
46,915
30,902
Other information
The company has taken advantage of the exemption provided in Financial Reporting Standard 102 Section 33 from disclosing related party transactions with group companies.
22
Ultimate controlling party
The ultimate parent company is CRJ Services Holdings Ltd, a company registered in England and Wales.
CRJ Services Limited, is consolidated within the CRJ Services Holdings Ltd's group financial statements and copies can be obtained upon request from the group's registered office Brook House Farm,London Road, Allostock, Knutsford, Cheshire, WA16 9LU.
23
Prior period adjustment
Adjustments to equity
The prior period adjustments do not give rise to any effect upon equity.
Adjustments to profit for the previous financial period
2022
£
Total adjustments
-
CRJ SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
23
Prior period adjustment
(Continued)
- 26 -
Notes to adjustments
Change in accounting policy for sale of hire fleet assets
During the year, the company has changed its accounting policy in relation to the sale of assets that form part of the company's hire fleet. Where assets, previously held as part of the company's hire fleet, are sold to customers following a period of advertisement, the carrying value of the asset will be charged to cost of sales and the sales proceeds will be credited to turnover. The financial statements have been restated to reflect this change in accounting policy. This change has affected the previously reported turnover, cost of sales and administrative expenses.
Previously reported turnover for 2022 has increased by £1,465,493.
Previously reported cost of sales for 2022 has increased by £1,461,932. This relates to a £1,304,091 increase in machinery purchases for resale and a £157,841 reduction in the profit on sale of tangible assets.
Previously reported administrative expenses for 2022 has increased by £3,561. This relates to a £3,561 reduction in the profit on sale of tangible assets.
This prior period adjustment has had no affect on previously stated profits, retained profits or net assets of the company.
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