Company registration number 10143143 (England and Wales)
CARTALEX LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
CARTALEX LIMITED
COMPANY INFORMATION
Directors
David Alexander
Benjamin Carter
Richard Gladwin
Alexander Kirk
Angus MacDonald
(Appointed 14 April 2023)
Company number
10143143
Registered office
85 Great Portland Street
LONDON
W1W 7LT
Auditor
MMG Chartered Accountants
4 Albert Place
PERTH
PH2 8JE
Business address
per Edwards Engineering (Perth) Limited
Glenearn Road
PERTH
PH2 0NJ
Bankers
Barclays
197 High Street
PERTH
PH1 5PB
Solicitors
MacRoberts LLP
Excel House
30 Semple Street
EDINBURGH
EH3 8BL
CARTALEX LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 5
Profit and loss account
6
Group statement of comprehensive income
7
Group balance sheet
8 - 9
Company balance sheet
10
Group statement of changes in equity
11 - 12
Company statement of changes in equity
13
Group statement of cash flows
14
Company statement of cash flows
15
Notes to the financial statements
16 - 36
CARTALEX LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Review of the business

The directors aim to present a balanced and comprehensive review of the development and performance of the business during the year and its position at the year end. The directors review is consistent with the size and non-complex nature of the business and is written in the context of the risks and uncertainties faced.

The company’s core business is in steel fabrication, mechanical, electrical and structural engineering. Trading for the period remained strong with sales growing from £9.90 million to £10.25 million during the period. This continues to be mainly driven from a number of larger projects in maltings and general industrial sectors.

The business is now working on a number of larger projects for customers which will continue through 2024 and into H1 2025. The company’s markets generally remain strong with strong enquiry levels.

 

After having experienced difficult trading from one large project in Edwards Engineering in 2022, the profitability improved considerably in 2023 with gross and net margins showing significant growth resulting to £998,544 profit after tax. The Company also raised additional equity capital in March 2023 which together with the P&L profit contribution, led to the net assets improving by £2.17 million.

 

The directors are not aware at this date of this report, of any material changes in the company’s activities in the next year.

Principal risks and uncertainties

Whilst the Group has reduced the exposure to any one sector by diversification, the continuing uncertainty and softening of the macro-economic environment remains a risk. Post Brexit availability of skilled labour is also a key risk to the Group as is the impact of both Brexit and world conflicts on the global supply chain.

Development and performance

Future projects and developments include several maltings projects in Scotland and Northern England, a major upgrade to a flour mill, the installation of new coffee roasting and handling equipment for a major roaster and a number of larger grain handling projects. The current order book remains healthy and enquiry levels remain buoyant.

Key performance indicators

There was a increase in turnover from the previous year of approximately 3.5%. The profit after tax of £998,544 follows the prior year where this was a loss of £4.65 million. Following 2022 when reserves were negative, the closing reserve position in 2023 is £532,088.

On behalf of the board

David Alexander
Director
10 April 2024
CARTALEX LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company and group continued to be that of a holding company.

 

The Group's principal activities were those of general engineering including structural steelwork, industrial mechanical handling and grain drying.

Results and dividends

The results for the year are set out on page 6.

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

David Alexander
Benjamin Carter
Richard Gladwin
Alexander Kirk
Angus MacDonald
(Appointed 14 April 2023)
Auditor

MMG Chartered Accountants were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

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 auditor of the company 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 auditor of the company 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
David Alexander
Director
10 April 2024
2024-04-12
CARTALEX LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

CARTALEX LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CARTALEX LIMITED
- 4 -
Opinion

We have audited the financial statements of Cartalex Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 group's and parent 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.

Other information

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:

CARTALEX LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CARTALEX LIMITED
- 5 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their 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:

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 parent 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 parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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.

James McEwen FCCA CA (Senior Statutory Auditor)
For and on behalf of MMG Chartered Accountants
11 April 2024
Chartered Accountants
Statutory Auditor
4 Albert Place
PERTH
PH2 8JE
CARTALEX LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
2023
2022
Notes
£
£
Turnover
3
10,247,465
9,905,116
Cost of sales
(6,909,594)
(12,646,616)
Gross profit/(loss)
3,337,871
(2,741,500)
Distribution costs
(19,938)
(33,110)
Administrative expenses
(2,468,362)
(2,217,737)
Other operating income
82,172
63,607
Operating profit/(loss)
4
931,743
(4,928,740)
Interest receivable and similar income
7
621
32
Interest payable and similar expenses
8
(125,220)
(47,575)
Profit/(loss) before taxation
807,144
(4,976,283)
Tax on profit/(loss)
9
191,400
318,308
Profit/(loss) for the financial year
998,544
(4,657,975)
Profit/(loss) for the financial year is all attributable to the owners of the parent company.
CARTALEX LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
£
£
Profit/(loss) for the year
998,544
(4,657,975)
Other comprehensive income
Revaluation of tangible fixed assets
-
0
180,000
Actuarial gain on defined benefit pension schemes
209,000
565,000
Tax relating to other comprehensive income
(52,250)
(150,370)
Other comprehensive income for the year
156,750
594,630
Total comprehensive income for the year
1,155,294
(4,063,345)
Total comprehensive income for the year is all attributable to the owners of the parent company.
CARTALEX LIMITED
GROUP BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
10
41,637
41,637
Tangible assets
11
1,941,819
2,003,653
Investments
12
50,000
50,000
2,033,456
2,095,290
Current assets
Stocks
15
107,550
89,167
Debtors
16
1,233,117
1,153,683
Cash at bank and in hand
44,369
129,015
1,385,036
1,371,865
Creditors: amounts falling due within one year
17
(2,599,588)
(4,475,454)
Net current liabilities
(1,214,552)
(3,103,589)
Total assets less current liabilities
818,904
(1,008,299)
Creditors: amounts falling due after more than one year
18
(1,212,167)
(1,341,025)
Provisions for liabilities
Deferred tax liability
22
649
3,882
(649)
(3,882)
Net assets excluding pension surplus
(393,912)
(2,353,206)
Defined benefit pension surplus
23
926,000
717,000
Net assets/(liabilities)
532,088
(1,636,206)
Capital and reserves
Called up share capital
24
9,312
4,465
Share premium account
1,552,163
544,010
Revaluation reserve
552,297
552,297
Other reserves
(1,026,500)
(869,750)
Profit and loss reserves
(555,184)
(1,867,228)
Total equity
532,088
(1,636,206)

These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.

CARTALEX LIMITED
GROUP BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
31 December 2023
- 9 -
The financial statements were approved by the board of directors and authorised for issue on 10 April 2024 and are signed on its behalf by:
10 April 2024
David Alexander
Director
Company registration number 10143143 (England and Wales)
CARTALEX LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investments
12
2,520,666
2,520,666
Current assets
Debtors
16
583,485
-
0
Cash at bank and in hand
10,154
4,916
593,639
4,916
Creditors: amounts falling due within one year
17
(56,873)
(321,069)
Net current assets/(liabilities)
536,766
(316,153)
Total assets less current liabilities
3,057,432
2,204,513
Creditors: amounts falling due after more than one year
18
(1,158,924)
(1,206,053)
Net assets
1,898,508
998,460
Capital and reserves
Called up share capital
24
9,312
4,465
Share premium account
1,552,163
544,010
Profit and loss reserves
337,033
449,985
Total equity
1,898,508
998,460

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £112,952 (2022 - £36,219 loss).

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

The financial statements were approved by the board of directors and authorised for issue on 10 April 2024 and are signed on its behalf by:
10 April 2024
David Alexander
Director
Company registration number 10143143 (England and Wales)
CARTALEX LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Share premium account
Revaluation reserve
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
£
Balance at 1 January 2022
4,465
544,010
372,297
(455,120)
1,961,487
2,427,139
Year ended 31 December 2022:
Loss for the year
-
-
-
-
(4,657,975)
(4,657,975)
Other comprehensive income:
Revaluation of tangible fixed assets
-
-
180,000
-
-
180,000
Actuarial gains on defined benefit plans
-
-
-
-
565,000
565,000
Tax relating to other comprehensive income
-
-
-
0
-
(150,370)
(150,370)
Total comprehensive income
-
-
180,000
-
(4,243,345)
(4,063,345)
Transfers
-
-
-
-
414,630
414,630
Other movements
-
-
-
(414,630)
-
(414,630)
Balance at 31 December 2022
4,465
544,010
552,297
(869,750)
(1,867,228)
(1,636,206)
CARTALEX LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Share capital
Share premium account
Revaluation reserve
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
£
- 12 -
Year ended 31 December 2023:
Profit for the year
-
-
-
-
998,544
998,544
Other comprehensive income:
Actuarial gains on defined benefit plans
-
-
-
-
209,000
209,000
Tax relating to other comprehensive income
-
-
-
0
-
(52,250)
(52,250)
Total comprehensive income
-
-
-
-
1,155,294
1,155,294
Issue of share capital
24
4,847
1,008,153
-
-
-
1,013,000
Transfers
-
-
-
-
156,750
156,750
Other movements
-
-
-
(156,750)
-
(156,750)
Balance at 31 December 2023
9,312
1,552,163
552,297
(1,026,500)
(555,184)
532,088
CARTALEX LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
4,465
544,010
486,204
1,034,679
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
(36,219)
(36,219)
Balance at 31 December 2022
4,465
544,010
449,985
998,460
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
(112,952)
(112,952)
Issue of share capital
24
4,847
1,008,153
-
1,013,000
Balance at 31 December 2023
9,312
1,552,163
337,033
1,898,508
CARTALEX LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
26
(560,692)
(1,662,396)
Interest paid
(125,220)
(47,575)
Income taxes refunded/(paid)
28,061
(11,151)
Net cash outflow from operating activities
(657,851)
(1,721,122)
Investing activities
Purchase of tangible fixed assets
(45,497)
-
Proceeds from disposal of tangible fixed assets
450
350
Interest received
621
32
Net cash (used in)/generated from investing activities
(44,426)
382
Financing activities
Proceeds from issue of shares
1,013,000
-
Issue of convertible loans
-
795,000
Repayment of borrowings
-
(2,420)
Repayment of bank loans
(124,771)
169,581
Payment of finance leases obligations
(2,723)
(7,005)
Net cash generated from financing activities
885,506
955,156
Net increase/(decrease) in cash and cash equivalents
183,229
(765,584)
Cash and cash equivalents at beginning of year
(435,567)
330,017
Cash and cash equivalents at end of year
(252,338)
(435,567)
Relating to:
Cash at bank and in hand
44,369
129,015
Bank overdrafts included in creditors payable within one year
(296,707)
(564,582)
CARTALEX LIMITED
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
27
(861,624)
(746,636)
Interest paid
(96,002)
(18,548)
Income taxes (paid)/refunded
(5,053)
5,053
Net cash outflow from operating activities
(962,679)
(760,131)
Financing activities
Proceeds from issue of shares
1,013,000
-
Issue of convertible loans
-
795,000
Repayment of bank loans
(45,083)
(43,037)
Net cash generated from financing activities
967,917
751,963
Net increase/(decrease) in cash and cash equivalents
5,238
(8,168)
Cash and cash equivalents at beginning of year
4,916
13,084
Cash and cash equivalents at end of year
10,154
4,916
CARTALEX LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
1
Accounting policies
Company information

Cartalex Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 85 Great Portland Street, LONDON, W1W 7LT.

 

The group consists of Cartalex Ltd and all of its subsidiaries.

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, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Cartalex Ltd together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

CARTALEX LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

 

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

 

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

1.4
Going concern

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.

As at 31 December 2023 the Balance Sheet has reversed the negative equity of £1,636,206 from 31st December 2022 and now shows a positive Net asset position of £532,088.

1.5
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.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.6
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.7
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.

CARTALEX LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -

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:

Freehold land and buildings
0% per annum
Plant and equipment
10% per annum straight line
Fixtures and fittings
25% per annum straight line
Computers
25% per annum straight line
Motor vehicles
10% per annum straight line

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 recognised in the profit and loss account.

1.8
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

 

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

 

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.9
Impairment of fixed assets

At each reporting period end date, the group 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.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

CARTALEX LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -

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.

1.10
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 held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

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.

1.11
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.

1.12
Financial instruments

The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and 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.

CARTALEX LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
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 group 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.

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 group 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.

CARTALEX LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
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 group's contractual obligations expire or are discharged or cancelled.

1.13
Compound instruments

The component parts of compound instruments issued by the group are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortised cost basis using the effective interest method until extinguished upon conversion or at the instrument's maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity net of income tax effects and is not subsequently remeasured.

1.14
Equity instruments

Equity instruments issued by the group 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 group.

1.15
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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

CARTALEX LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 22 -
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 if, and only if, there is 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.

1.16
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.

1.17
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.

 

The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.

The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.

 

Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.

The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.

CARTALEX LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 23 -
1.18
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

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.

1.19
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.

1.20
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 group’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.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Contract revenue
10,247,465
9,905,116
CARTALEX LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Turnover and other revenue
(Continued)
- 24 -
2023
2022
£
£
Turnover analysed by geographical market
UK
10,247,465
9,905,116
2023
2022
£
£
Other revenue
Interest income
621
32
Grants received
660
6,269
4
Operating profit/(loss)
2023
2022
£
£
Operating profit/(loss) for the year is stated after charging/(crediting):
Exchange gains
(2,072)
(23,639)
Government grants
(660)
(6,269)
Depreciation of owned tangible fixed assets
106,804
110,648
Loss on disposal of tangible fixed assets
77
563
Operating lease charges
6,082
-
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
5,121
2,400
Audit of the financial statements of the company's subsidiaries
12,283
12,872
17,404
15,272
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Office and management
31
29
5
4
Workshop
51
56
-
-
Total
82
85
5
4
CARTALEX LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Employees
(Continued)
- 25 -

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
3,038,749
3,326,486
-
0
-
0
Social security costs
292,953
296,809
-
-
Pension costs
111,826
129,779
-
0
-
0
3,443,528
3,753,074
-
0
-
0
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
621
32
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
621
32
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
124,973
44,428
Other interest on financial liabilities
-
2,491
124,973
46,919
Other finance costs:
Interest on finance leases and hire purchase contracts
247
656
Total finance costs
125,220
47,575
9
Taxation
2023
2022
£
£
Current tax
Adjustments in respect of prior periods
(135,917)
(40,516)
CARTALEX LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
2023
2022
£
£
(Continued)
- 26 -
Deferred tax
Origination and reversal of timing differences
(55,483)
(277,792)
Total tax credit
(191,400)
(318,308)

The actual credit for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit/(loss) before taxation
807,144
(4,976,283)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
201,786
(945,494)
Tax effect of expenses that are not deductible in determining taxable profit
-
0
15,887
Unutilised tax losses carried forward
31,027
6,882
Losses on discontinued operations not recognised
-
0
(16,204)
Adjustments in respect of prior years
(135,197)
-
0
Permanent capital allowances in excess of depreciation
(34)
(2,118)
Depreciation on assets not qualifying for tax allowances
1,188
-
Other permanent differences
11,183
-
0
Losses utilised
(301,353)
622,739
Taxation credit
(191,400)
(318,308)

In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

2023
2022
£
£
Deferred tax arising on:
Actuarial differences recognised as other comprehensive income
52,250
150,370
CARTALEX LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
10
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
41,637
Amortisation and impairment
At 1 January 2023 and 31 December 2023
-
0
Carrying amount
At 31 December 2023
41,637
At 31 December 2022
41,637
The company had no intangible fixed assets at 31 December 2023 or 31 December 2022.
11
Tangible fixed assets
Group
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost or valuation
At 1 January 2023
1,560,000
767,570
105,106
303,846
327,610
3,064,132
Additions
-
0
1,100
4,069
14,478
25,850
45,497
Disposals
-
0
(16,775)
-
0
-
0
-
0
(16,775)
At 31 December 2023
1,560,000
751,895
109,175
318,324
353,460
3,092,854
Depreciation and impairment
At 1 January 2023
18,768
527,587
95,457
277,565
141,102
1,060,479
Depreciation charged in the year
6,252
46,974
7,812
15,316
30,450
106,804
Eliminated in respect of disposals
-
0
(16,248)
-
0
-
0
-
0
(16,248)
At 31 December 2023
25,020
558,313
103,269
292,881
171,552
1,151,035
Carrying amount
At 31 December 2023
1,534,980
193,582
5,906
25,443
181,908
1,941,819
At 31 December 2022
1,541,232
239,983
9,649
26,281
186,508
2,003,653
The company had no tangible fixed assets at 31 December 2023 or 31 December 2022.

Freehold land and buildings with a carrying amount of £1.1 million (2022 - £1.1 million) have been pledged to secure borrowings of the company. The company is not allowed to pledge these assets as security for other borrowings or to sell them to another entity.

CARTALEX LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Tangible fixed assets
(Continued)
- 28 -

Land and buildings with a carrying amount of £1.1 million were revalued on 15 September 2021 by Graham & Sibbald, independent valuers not connected with the company on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties.

Land and buildings are carried at valuation. If land and buildings were measured using the cost model, the carrying amounts would have been approximately £624,826 (2022 - £640,440), being cost £992,178 (2022 - £992,178) and depreciation £367,352 (2022 - £351,738)

12
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
13
-
0
-
0
2,470,666
2,470,666
Investments in joint ventures
14
50,000
50,000
50,000
50,000
50,000
50,000
2,520,666
2,520,666
Movements in fixed asset investments
Group
Shares in joint ventures
£
Cost or valuation
At 1 January 2023 and 31 December 2023
50,000
Carrying amount
At 31 December 2023
50,000
At 31 December 2022
50,000
Movements in fixed asset investments
Company
Shares in subsidiaries and joint ventures
£
Cost or valuation
At 1 January 2023 and 31 December 2023
2,520,666
Carrying amount
At 31 December 2023
2,520,666
At 31 December 2022
2,520,666
13
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

CARTALEX LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Subsidiaries
(Continued)
- 29 -
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Edwards Engineering (Perth) Limited
Glenearn works, Glenearn Road, Perth, Scotland
Ordinary
100.00
Narvida Limited
Taxi Way,Hillend Industrial Park,Dunfermline,Scotland
Ordinary
100.00
14
Joint ventures

Details of joint ventures at 31 December 2023 are as follows:

Name of undertaking
Registered office
Interest
% Held
held
Direct
Cockayne Sytems Limited
Glenearn Works, Glenearn Road, Perth, Scotland
Ordinary
50.00
15
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
23,573
16,468
-
-
Work in progress
78,402
14,357
-
-
Finished goods and goods for resale
5,575
58,342
-
0
-
0
107,550
89,167
-
-
16
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
911,497
914,790
-
0
-
0
Gross amounts owed by contract customers
70,802
147,693
-
0
-
0
Corporation tax recoverable
119,007
16,204
-
0
-
0
Amounts owed by group undertakings
-
-
583,190
-
Other debtors
74,076
5,254
295
-
0
Prepayments and accrued income
57,735
69,742
-
0
-
0
1,233,117
1,153,683
583,485
-
CARTALEX LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 30 -
17
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
19
421,478
687,308
45,084
43,038
Obligations under finance leases
20
2,042
2,723
-
0
-
0
Trade creditors
841,017
1,120,490
1,770
-
0
Amounts owed to group undertakings
-
0
-
0
-
0
267,090
Corporation tax payable
-
0
5,053
-
0
5,053
Other taxation and social security
174,134
466,489
-
287
Other creditors
1,017,019
2,002,227
6,528
3,201
Accruals and deferred income
143,898
191,164
3,491
2,400
2,599,588
4,475,454
56,873
321,069
18
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Convertible loans
21
795,000
795,000
795,000
795,000
Bank loans and overdrafts
19
417,167
543,983
363,924
411,053
Obligations under finance leases
20
-
0
2,042
-
0
-
0
1,212,167
1,341,025
1,158,924
1,206,053
Amounts included above which fall due after five years are as follows:
Payable by instalments
183,590
238,902
183,590
238,902
19
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
541,938
666,709
409,008
454,091
Bank overdrafts
296,707
564,582
-
0
-
0
838,645
1,231,291
409,008
454,091
Payable within one year
421,478
687,308
45,084
43,038
Payable after one year
417,167
543,983
363,924
411,053

The long-term loans are secured by fixed and floating charges over the assets of the company. The fixed interest rate is 3.85% per annum for 10 years from the date of first drawdown. The loan is scheduled to mature 2031

CARTALEX LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
20
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
2,042
4,765
-
0
-
0

Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. 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 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

21
Convertible loan notes
Group
Company
2023
2022
2023
2022
£
£
£
£
Liability component of convertible loan notes
795,000
795,000
795,000
795,000

The net proceeds received from the issue of the convertible loan notes have been split between the financial liability element and an equity component, representing the fair value of the embedded option to convert the financial liability into equity.

The liability component is measured at amortised cost, and the difference between the carrying amount of the liability at the date of issue and the amount reported in the Balance Sheet represents the effective interest rate less interest paid to that date.

The effective rate of interest is 10%.

The equity component of the convertible loan notes has been credited to the equity reserve.

22
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
2023
2022
Group
£
£
Accelerated capital allowances
649
3,882
The company has no deferred tax assets or liabilities.
CARTALEX LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
22
Deferred taxation
(Continued)
- 32 -
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 January 2023
3,882
-
Credit to profit or loss
(3,233)
-
Liability at 31 December 2023
649
-
23
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
111,826
113,111

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

Defined benefit schemes

The company operates a defined benefit scheme for qualifying employees. The scheme ceased to accrue on 31st August 2007.

 

The company has agreed with the Trustees to target the removal the scheme's deficit over a period of 6 years and 1 month from 1 January 2019 by payment of a single contribution of £30,667 during 2019 and then £50,000 p.a., payable by instalments, from 1 January 2020 to 31 January 2025. This was reviewed during the year, and agreed that deficit contributions were no longer required with a new Schedule of Contributions being certified by the scheme actuary on 15th February 2023.

 

The most recent actuarial valuations of plan assets and the present value of the defined benefit obligation were carried out at 1st January 2022 by A Thomson, Fellow of the Institute of Actuaries. The present value of the defined benefit obligation, the related current service cost and past service cost were measured using the projected unit credit method.

2023
2022
Key assumptions
%
%
Discount rate
4.35
4.75
Expected rate of increase of pensions in payment
2.85
3.00
CARTALEX LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
23
Retirement benefit schemes
(Continued)
- 33 -
Mortality assumptions
2023
2022

Assumed life expectations on retirement at age 65:

Years
Years
Retiring today
- Males
20
20.5
- Females
22.5
22.9
Retiring in 20 years
- Males
20.9
21.4
- Females
23.6
24.1

The amounts included in the balance sheet arising from obligations in respect of defined benefit plans are as follows:

2023
2022
Group
£
£
Present value of defined benefit obligations
2,644,000
2,652,000
Fair value of plan assets
(3,570,000)
(3,369,000)
Deficit in scheme
(926,000)
(717,000)
Group
2023
2022

Amounts recognised in the profit and loss account

£
£
Net interest on net defined benefit liability/(asset)
(34,000)
(3,000)
Group
2023
2022

Amounts taken to other comprehensive income

£
£
Actual return on scheme assets
(306,000)
562,000
Less: calculated interest element
158,000
78,000
Return on scheme assets excluding interest income
(148,000)
640,000
Actuarial changes related to obligations
(27,000)
(1,202,000)
Total costs/(income)
(175,000)
(562,000)
CARTALEX LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
23
Retirement benefit schemes
(Continued)
- 34 -
Group
2023

Movements in the present value of defined benefit obligations

£
Liabilities at 1 January 2023
2,652,000
Benefits paid
(105,000)
Actuarial gains and losses
(27,000)
Interest cost
124,000
At 31 December 2023
2,644,000
Group
2023

The defined benefit obligations arise from plans funded as follows:

£
Wholly unfunded obligations
-
Wholly or partly funded obligations
2,644,000
2,644,000
Group
2023

Movements in the fair value of plan assets

£
Fair value of assets at 1 January 2023
3,369,000
Interest income
158,000
Return on plan assets (excluding amounts included in net interest)
148,000
Benefits paid
(105,000)
At 31 December 2023
3,570,000

The actual return on plan assets was £138,000 (2020 - £369,000)

Fair value of plan assets at the reporting period end

Group
2023
2022
£
£
Other assets
3,570,000
3,369,000
24
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 1p each
931,169
446,480
9,312
4,465
CARTALEX LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
24
Share capital
(Continued)
- 35 -

 

25
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
9,469
15,695
-
-
Between two and five years
4,228
11,908
-
-
13,697
27,603
-
-
26
Cash absorbed by group operations
2023
2022
£
£
Profit/(loss) for the year after tax
998,544
(4,657,975)
Adjustments for:
Taxation credited
(191,400)
(318,308)
Finance costs
125,220
47,575
Investment income
(621)
(32)
Loss on disposal of tangible fixed assets
77
563
Depreciation and impairment of tangible fixed assets
106,804
110,648
Movements in working capital:
(Increase)/decrease in stocks
(18,383)
51,646
Decrease in debtors
23,369
2,681,376
(Decrease)/increase in creditors
(1,604,302)
422,111
Cash absorbed by operations
(560,692)
(1,662,396)
CARTALEX LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 36 -
27
Cash absorbed by operations - company
2023
2022
£
£
Loss for the year after tax
(112,952)
(36,219)
Adjustments for:
Finance costs
96,002
18,548
Movements in working capital:
(Increase)/decrease in debtors
(583,485)
430
Decrease in creditors
(261,189)
(729,395)
Cash absorbed by operations
(861,624)
(746,636)
28
Analysis of changes in net debt - group
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
129,015
(84,646)
44,369
Bank overdrafts
(564,582)
267,875
(296,707)
(435,567)
183,229
(252,338)
Borrowings excluding overdrafts
(666,709)
124,771
(541,938)
Obligations under finance leases
(4,765)
2,723
(2,042)
Convertible loan notes
(795,000)
-
(795,000)
(1,902,041)
310,723
(1,591,318)
29
Analysis of changes in net debt - company
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
4,916
5,238
10,154
Borrowings excluding overdrafts
(454,091)
45,083
(409,008)
Convertible loan notes
(795,000)
-
(795,000)
(1,244,175)
50,321
(1,193,854)
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