MERIT COURIERS LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023
Company registration number 10922171 (England and Wales)
MERIT COURIERS LIMITED
CONTENTS
Page
Balance sheet
1
Statement of changes in equity
2
Notes to the financial statements
3 - 13
MERIT COURIERS LIMITED
BALANCE SHEET
AS AT
31 AUGUST 2023
31 August 2023
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
5
32,276
Tangible assets
6
92,638
124,914
Current assets
Debtors
7
35,159
116,179
Cash at bank and in hand
208
14,594
35,367
130,773
Creditors: amounts falling due within one year
8
(42,185)
(179,091)
Net current liabilities
(6,818)
(48,318)
Total assets less current liabilities
(6,818)
76,596
Creditors: amounts falling due after more than one year
9
(48,504)
Provisions for liabilities
(17,601)
Net (liabilities)/assets
(6,818)
10,491
Capital and reserves
Called up share capital
100
100
Profit and loss reserves
(6,918)
10,391
Total equity
(6,818)
10,491
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
These financial statements have been prepared and delivered 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 29 August 2024 and are signed on its behalf by:
Mr R J Ashford
Director
Company registration number 10922171 (England and Wales)
MERIT COURIERS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2023
- 2 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 September 2021
100
63,973
64,073
Year ended 31 August 2022:
Loss and total comprehensive income
-
(21,082)
(21,082)
Dividends
-
(32,500)
(32,500)
Balance at 31 August 2022
100
10,391
10,491
Year ended 31 August 2023:
Loss and total comprehensive income
-
(17,309)
(17,309)
Balance at 31 August 2023
100
(6,918)
(6,818)
MERIT COURIERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023
- 3 -
1
Accounting policies
Company information
Merit Couriers Limited is a private company limited by shares incorporated in England and Wales. The registered office is Merit House, Whitewall Road, Medway City Estate, Rochester, ME2 4WS.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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
Going concern
The company has ceased to trade from February 2023 when it's trade was transferred to a group company, Merit Office Installations Limited. Due to this, these accounts have not been prepared on the going concern basis. The departure from the going concern basis has not resulted in any changes to the underlying transactions or balances.true
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
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 contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses 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, which is 10 years.
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.
MERIT COURIERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
1
Accounting policies
(Continued)
- 4 -
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures and fittings
33.33% Reducing balance
Motor vehicles
33.33% Reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
MERIT COURIERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
1
Accounting policies
(Continued)
- 5 -
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
MERIT COURIERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
1
Accounting policies
(Continued)
- 6 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
1.14
All costs are recognised in the profit and loss account in the year in which they were incurred.
1.15
Dividends to the company's shareholders are recognised when the dividends are approved for payment.
MERIT COURIERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
1
Accounting policies
(Continued)
- 7 -
1.16
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.
MERIT COURIERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 8 -
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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Tangible assets
The company has recognised tangible fixed assets with a carrying value of £nil, following the cessation of trade as outlined in note 1.2, at the reporting date (2022 - £99,105). Tangible assets are stated at their costs less provision for depreciation and impairment. Any tangible assets carried at revalued amounts are recorded at fair value at the date of revaluation less any subsequent accumulated deprecation and subsequent accumulated impairment losses.
In order to determine the fair value of tangible assets the company has used a valuation technique based on comparable market data. Valuations are obtained with sufficient regularity to ensure that the carrying value of revalued assets reflects current market conditions.
The company's accounting policy sets out the approach to calculating depreciation for tangible assets acquired. These estimates are based upon such factors as the expected use of the acquired asset and market conditions. At subsequent reporting dates the directors consider whether there are any factors such as changes in market conditions that indicate a need to reconsider the estimated used.
Where there are indications that the carrying value of tangible assets may be impaired the company undertakes tests to determine the recoverable amounts of assets. These tests require estimates for the fair value of asses less costs to sell and their value in use. Wherever possible the estimate of the fair value of assets is based upon observable market prices less the incremental costs of disposing the asset.
Goodwill
The company has recognised goodwill arising from business combinations with a carrying value of £nil, following the cessation of trade outlined in note 1.2, (2022 - £32,776) at the reporting date. On acquisition the company determines a reliable estimate of the useful life of goodwill based upon factors such as expected use of the acquired business, forecasts of expected future results and cash flow, and any legal, regulatory or contractual provision that can limit useful life. At each subsequent reporting date the directors consider whether there are any factors such as changes in market conditions that indicate a need to reconsider the useful life of goodwill and intangible assets.
MERIT COURIERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 9 -
3
Operating loss
2023
2022
Operating loss for the year is stated after charging:
£
£
Depreciation of owned tangible fixed assets
15,973
26,064
Loss on disposal of tangible fixed assets
453
1,900
Amortisation of intangible assets
5,385
6,463
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
7
9
5
Intangible fixed assets
Goodwill
£
Cost
At 1 September 2022
64,625
Transfers
(64,625)
At 31 August 2023
Amortisation and impairment
At 1 September 2022
32,349
Amortisation charged for the year
5,385
Transfers
(37,734)
At 31 August 2023
Carrying amount
At 31 August 2023
At 31 August 2022
32,276
Upon the cessation of trade, the goodwill along with the trade, was transferred to a group company, Merit Office Installations Limited.
MERIT COURIERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 10 -
6
Tangible fixed assets
Fixtures and fittings
Motor vehicles
Total
£
£
£
Cost
At 1 September 2022
4,020
142,611
146,631
Additions
5,000
5,000
Disposals
(4,020)
(147,611)
(151,631)
At 31 August 2023
Depreciation and impairment
At 1 September 2022
3,477
50,516
53,993
Depreciation charged in the year
90
15,883
15,973
Eliminated in respect of disposals
(3,567)
(66,399)
(69,966)
At 31 August 2023
Carrying amount
At 31 August 2023
At 31 August 2022
543
92,095
92,638
Included within the carrying value of tangible assets is £nil (2022 - £89,897) of motor vehicles held under finance leases or hire purchase agreements.
7
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
85,882
Corporation tax recoverable
11,383
11,023
Amounts owed by group undertakings
23,609
13,437
Other debtors
4,815
Prepayments and accrued income
167
1,022
35,159
116,179
MERIT COURIERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 11 -
8
Creditors: amounts falling due within one year
2023
2022
£
£
Factoring finance
34,058
Obligations under finance leases
10
24,722
Trade creditors
13,277
Amounts owed to group undertakings
622
61,883
Corporation tax
20,554
Other taxation and social security
21,009
35,229
Other creditors
1,900
Accruals and deferred income
8,022
42,185
179,091
The factoring charge was secured via a fixed and floating charge held by the lender over the company's assets.
9
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
10
48,504
10
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
24,722
In two to five years
48,504
73,226
MERIT COURIERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 12 -
11
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Balance owed by/(owed to)
2023
2022
£
£
Loans with group companies
23,550
(58,791)
Other information
The loans with group companies are interest free, unsecured and have no fixed repayment schedules.
12
Directors' transactions
Description
% Rate
Opening balance
Amounts advanced
Amounts written off
Closing balance
£
£
£
£
Mr S P Weekes - loan
-
(184)
184
-
-
Mr P Davidson - loan
-
4,815
978
(5,793)
-
4,631
1,162
(5,793)
-
13
Parent company
During the period under review, the company was under the ultimate control of its parent company, Merit Group Holdings Limited. Their registered office is Merit House, Units 1-4 Whitewall Road, Medway City Estate, Rochester, Kent, ME2 4WS
14
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Emphasis of matter - financial statements prepared on a basis other than going conern
In forming our opinion of the financial statements, which is not qualified, we have considered the adequacy of the disclosure made in note 1.2, Going concern to the financial statements concerning the company ability to continue as a going concern.
As disclosed in note 1.2, the directors have concluded that the company is not a going concern following the decision to cease trading from February 2023. The financial statements have been prepared on a basis other than going concern.
MERIT COURIERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
14
Audit report information
(Continued)
- 13 -
Senior Statutory Auditor:
Mr Mark Attwood FCCA
Statutory Auditor:
Kreston Reeves LLP
Date of audit report:
29 August 2024
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