Company registration number 03450423 (England and Wales)
METRO SUPPLY CHAIN LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
METRO SUPPLY CHAIN LIMITED
COMPANY INFORMATION
Directors
Mr M Descheneaux
Mr H Nanji
Mr C Fenton
(Appointed 3 April 2023)
Company number
03450423
Registered office
Unit 1 Saxham Business Park
Little Saxham
Bury St. Edmunds
Suffolk
England
IP28 6RX
Auditor
Mercer & Hole LLP
The Pinnacle
170 Midsummer Boulevard
Milton Keynes
Bucks
MK9 1BP
METRO SUPPLY CHAIN LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
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 - 21
METRO SUPPLY CHAIN LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 1 -
The directors present the strategic report for the year ended 30 September 2023.
Fair Review of the business
Turnover has decreased from £20,520,234 to £15,568,685 and the company has generated a loss before tax of £238,528 (2022 profit: £252,137). The prior period, however, represented an 18 month period.
The company had net assets of £985,353 (2022: £1,229,818) at the year end, putting it in a healthy position.
Principal risks and uncertainties
The principal risks and uncertainties that face the company are liquidity, credit and competition risks.
Liquidity Risk
The company seeks to manage its liquidity risk by ensuring it has enough cash flow to meet foreseeable needs and to invest in assets.
Credit Risk
The principal asset of the company is trade debtors, which is shown in the accounts net of a reserve for doubtful debts.
Competition Risk
The company operates in a highly competitive environment where a significant amount of business is undertaken without any long term contracts. The organisation manages this risk by providing a high quality service and maintaining strong relationships with customers.
Key performance indicators
The directors of our business monitor its performance by reference to the following key performance indicators:
Turnover – when taken on a pro rata basis (the prior period being 18 months), turnover increased by £1.8m. This was driven by strong demand at the beginning of the year.
Gross profit as a percentage of sales reduced from 16.7% to 11.2% due to costs related to investing for growth in an additional site and its associated staff costs and also to one-off costs of moving customers to different locations within the estate.
Operating profit – reduced by £488k due mainly to the reduction in gross margin for the reasons mentioned above.
Following the investments in facilities and staff made in 2023, it is expected 2024 will return to profitable growth.
Non-financial key performance indicators include:
Safety, delivery times and efficiency levels remain the key focus, all of which are tracked and remain at high levels.
METRO SUPPLY CHAIN LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 2 -
Future developments
2023 was a year of investing in the business for its future growth which has proved successful. Our new site and the consolidation process undertaken in several other locations have put us in a strong position to deliver good growth in 2024.
Our customer base continues to diversify and to sustain and continue this growth, we continue to work on the following areas to improve our business:
Mr M Descheneaux
Director
6 February 2024
METRO SUPPLY CHAIN LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 30 September 2023.
Principal activities
The principal activity of the company continued to be that of logistics services.
Results and dividends
The results for the year are set out on page 8.
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 M Descheneaux
Mr M Graham
(Resigned 3 April 2023)
Mr H Nanji
Mr C Fenton
(Appointed 3 April 2023)
Auditor
The auditor, Mercer & Hole LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr M Descheneaux
Director
6 February 2024
METRO SUPPLY CHAIN LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 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.
METRO SUPPLY CHAIN LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF METRO SUPPLY CHAIN LIMITED
- 5 -
Opinion
We have audited the financial statements of Metro Supply Chain Limited (the 'company') for the year ended 30 September 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 30 September 2023 and of its loss 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.
METRO SUPPLY CHAIN LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF METRO SUPPLY CHAIN 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. These included, but were not limited to, the Companies Act 2006 and tax legislation.
We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements and the financial report (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate entries including journals to overstate revenue or understate expenditure and management bias in accounting estimates.
Audit procedures performed by the engagement team included:
discussions with management, including considerations of known or suspected instances of non- compliance with laws and regulations and fraud;
gaining an understanding of management's controls designed to prevent and detect irregularities; and
identifying and testing journal entries.
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.
METRO SUPPLY CHAIN LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF METRO SUPPLY CHAIN LIMITED
- 7 -
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 members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Steve Robinson FCA
Senior Statutory Auditor
For and on behalf of Mercer & Hole LLP
7 February 2024
Chartered Accountants
Statutory Auditor
The Pinnacle
170 Midsummer Boulevard
Milton Keynes
Bucks
MK9 1BP
METRO SUPPLY CHAIN LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 8 -
Year
Period
ended
ended
30 September
30 September
2023
2022
Notes
£
£
Turnover
3
15,568,685
20,520,234
Cost of sales
(13,818,002)
(17,098,577)
Gross profit
1,750,683
3,421,657
Administrative expenses
(1,983,246)
(3,165,993)
Operating (loss)/profit
4
(232,563)
255,664
Interest payable and similar expenses
6
(5,965)
(3,527)
(Loss)/profit before taxation
(238,528)
252,137
Tax on (loss)/profit
7
(5,937)
(170,606)
(Loss)/profit for the financial year
(244,465)
81,531
The profit and loss account has been prepared on the basis that all operations are continuing operations.
METRO SUPPLY CHAIN LIMITED
BALANCE SHEET
AS AT
30 SEPTEMBER 2023
30 September 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
8
56,209
97,280
Tangible assets
9
1,160,570
238,470
1,216,779
335,750
Current assets
Debtors
10
4,368,362
3,483,280
Cash at bank and in hand
1,018,295
412,754
5,386,657
3,896,034
Creditors: amounts falling due within one year
11
(5,207,695)
(2,742,227)
Net current assets
178,962
1,153,807
Total assets less current liabilities
1,395,741
1,489,557
Provisions for liabilities
Provisions
13
345,612
200,900
Deferred tax liability
14
64,776
58,839
(410,388)
(259,739)
Net assets
985,353
1,229,818
Capital and reserves
Called up share capital
16
6
6
Profit and loss reserves
985,347
1,229,812
Total equity
985,353
1,229,818
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true
The financial statements were approved by the board of directors and authorised for issue on 6 February 2024 and are signed on its behalf by:
Mr M Descheneaux
Director
Company registration number 03450423 (England and Wales)
METRO SUPPLY CHAIN LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 April 2021
6
1,148,281
1,148,287
Period ended 30 September 2022:
Profit and total comprehensive income
-
81,531
81,531
Balance at 30 September 2022
6
1,229,812
1,229,818
Year ended 30 September 2023:
Loss and total comprehensive income
-
(244,465)
(244,465)
Balance at 30 September 2023
6
985,347
985,353
METRO SUPPLY CHAIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 11 -
1
Accounting policies
Company information
Metro Supply Chain Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 1 Saxham Business Park, Little Saxham, Bury St. Edmunds, Suffolk, England, IP28 6RX.
1.1
Reporting period
The prior year figures are for an 18 month period to align the company's reporting date with connected entities.
1.2
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 entity.
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 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; 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 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Metro Supply Chain Holdings (UK) Limited. These consolidated financial statements are available from its registered office, Unit 1 Saxham Business Park, Little Saxham, Bury St. Edmunds, Suffolk, England, IP28 6RX.
1.3
Going concern
The loss in the accounts, generated by investing for future growth, is expected to turn into profit over the coming period and the business has forecast continuing profitability for at least the next year and moving forwards. Therefore, at the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.true
METRO SUPPLY CHAIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.4
Turnover
Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably.
1.5
Intangible fixed assets other than goodwill
Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses. Any intangible assets carried at revalued amounts, are recorded at the fair value at the date of revaluation, as determined by reference to an active market, less any subsequent accumulated amortisation and subsequent accumulated impairment losses.
Intangible assets acquired as part of a business combination are only recognised separately from goodwill when they arise from contractual or other legal rights, are separable, the expected future economic benefits are probable and the cost or value can be measured reliably.
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:
Patents, trademarks & licences
20% straight line
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
1.6
Tangible fixed assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Long leasehold property
Over the length of the lease
Plant and Machinery
10%-25% straight line
Equipment
20%-25% straight line
METRO SUPPLY CHAIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.7
Financial instruments
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.
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.
1.8
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.
METRO SUPPLY CHAIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.
1.9
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.10
Retirement benefits
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund.
When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.11
Leases
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset.
Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
METRO SUPPLY CHAIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 15 -
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.
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.
Dilapidation provision
The directors have provided a best estimate for dilapidations on leasehold property based on advice from property professionals, experience gained from previous dilapidations negotiations and estimates for completing potential dilapidations work before returning the building to the landlord.
3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Haulage
2,960,777
4,087,282
Storage
11,880,598
15,348,502
Management fees
727,310
1,084,450
15,568,685
20,520,234
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
15,568,685
20,520,234
4
Operating (loss)/profit
2023
2022
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(421)
Fees payable to the company's auditor for the audit of the company's financial statements
32,000
36,000
Depreciation of owned tangible fixed assets
140,890
129,402
Profit on disposal of tangible fixed assets
-
(326,798)
Amortisation of intangible assets
41,071
61,305
Operating lease charges
3,051,955
2,768,549
METRO SUPPLY CHAIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 16 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
168
175
2023
2022
£
£
Wages and salaries
5,063,497
7,545,322
Social security costs
481,692
609,089
Pension costs
98,706
432,484
5,643,895
8,586,895
6
Interest payable and similar expenses
2023
2022
£
£
Interest on finance leases and hire purchase contracts
2,352
3,527
Other interest
3,613
5,965
3,527
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
208,183
Deferred tax
Origination and reversal of timing differences
5,937
8,812
Changes in tax rates
14,121
Adjustment in respect of prior periods
(60,510)
Total deferred tax
5,937
(37,577)
Total tax charge
5,937
170,606
METRO SUPPLY CHAIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
7
Taxation
(Continued)
- 17 -
2023
2022
£
£
(Loss)/profit before taxation
(238,528)
252,137
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 22.01% (2022: 19.00%)
(52,500)
47,906
Tax effect of expenses that are not deductible in determining taxable profit
5,340
115,747
Gains not taxable
118,063
Effect of change in corporation tax rate
711
14,121
Group relief
49,610
Permanent capital allowances in excess of depreciation
(2,507)
2,009
Depreciation on assets not qualifying for tax allowances
5,938
Amortisation on assets not qualifying for tax allowances
(62,092)
Adjustments in respect of financial assets
(10,576)
Other permanent differences
5,283
Deferred tax adjustments in respect of prior years
(60,510)
Taxation charge for the year
5,937
170,606
8
Intangible fixed assets
Patents, trademarks & licences
£
Cost
At 1 October 2022 and 30 September 2023
197,271
Amortisation and impairment
At 1 October 2022
99,991
Amortisation charged for the year
41,071
At 30 September 2023
141,062
Carrying amount
At 30 September 2023
56,209
At 30 September 2022
97,280
METRO SUPPLY CHAIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 18 -
9
Tangible fixed assets
Long leasehold property
Plant and Machinery
Equipment
Total
£
£
£
£
Cost or valuation
At 1 October 2022
107,549
399,546
176,885
683,980
Additions
613,784
344,982
104,224
1,062,990
At 30 September 2023
721,333
744,528
281,109
1,746,970
Depreciation and impairment
At 1 October 2022
39,583
284,533
121,394
445,510
Depreciation charged in the year
44,874
62,528
33,488
140,890
At 30 September 2023
84,457
347,061
154,882
586,400
Carrying amount
At 30 September 2023
636,876
397,467
126,227
1,160,570
At 30 September 2022
67,966
115,013
55,491
238,470
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:
2023
2022
£
£
Plant and Machinery
14,115
29,487
In respect of tangible assets held at valuation, the aggregate cost, depreciation and comparable carrying amount that would have been recognised if the assets had been carried under the historical cost model are as follows:
Long leasehold property
2023
2022
£
£
Cost
-
103,412
Accumulated depreciation
-
(12,600)
Disposals
-
(90,812)
Carrying value
-
-
METRO SUPPLY CHAIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 19 -
10
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,423,161
2,128,139
Corporation tax recoverable
30,000
Amounts owed by group undertakings
1,055,710
819,122
Other debtors
250,441
265,344
Prepayments and accrued income
609,050
270,675
4,368,362
3,483,280
11
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
11,519
Obligations under finance leases
12
23,675
34,615
Trade creditors
1,666,380
1,299,259
Amounts owed to group undertakings
1,592,950
Corporation tax
208,183
Other taxation and social security
532,791
436,892
Deferred income
675,516
493,236
Other creditors
39,930
28,079
Accruals and deferred income
676,453
230,444
5,207,695
2,742,227
Bank loans and overdrafts are secured over the assets of the company.
Obligations under finance leases and hire purchase contracts totaling £23,675 (2022: £34,615) are secured on the assets to which they relate.
12
Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
2023
2022
£
£
Within one year
25,908
39,200
Less: future finance charges
(2,233)
(4,585)
23,675
34,615
METRO SUPPLY CHAIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 20 -
13
Provisions for liabilities
2023
2022
£
£
Dilapidation provision
345,612
200,900
Movements on provisions:
Dilapidation provision
£
At 1 October 2022
200,900
Additional provisions in the year
144,712
At 30 September 2023
345,612
14
Deferred taxation
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
184,799
60,662
Tax losses
(117,651)
-
Short Term Timing Differences
(2,372)
(1,823)
64,776
58,839
2023
Movements in the year:
£
Liability at 1 October 2022
58,839
Charge to profit or loss
5,937
Liability at 30 September 2023
64,776
15
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
98,706
432,484
METRO SUPPLY CHAIN LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 21 -
16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
6
6
6
6
17
Operating lease commitments
Lessee
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
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:
2023
2022
£
£
Within one year
2,035,372
1,386,895
Between two and five years
6,769,949
2,043,220
In over five years
11,663,274
20,468,595
3,430,115
18
Ultimate controlling party
The immediate parent company is Metro Supply Chain (PL UK) Limited.
The ultimate controlling party is Hanif Nanji.
The parent undertaking of the largest group within which the company belongs and for which group financial statements are prepared is Metro Supply Chain Group Inc., a company registered in Canada, whose registered office is 1002, Rue Sherbrooke Ouest, Suite 2000, Montreal, QC H3A 3L6.
The parent undertaking of the smallest group within which the company belongs and for which group financial statements are prepared is Metro Supply Chain Holdings (UK) Limited, a company registered in the United Kingdom, whose registered office is Unit 1 Saxham Business Park, Little Saxham, Bury St. Edmunds, Suffolk, England, IP28 6RX.
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