Company registration number NI010084 (Northern Ireland)
ROAD TRUCKS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
ROAD TRUCKS LIMITED
COMPANY INFORMATION
Directors
J Marks
S Russell
Secretary
S Russell
Company number
NI010084
Registered office
Circular Road
Larne
Co. Antrim
BT40 3AB
Auditors
Falconer Stewart Chartered Accountants
248 Upper Newtownards Road
Belfast
BT4 3EU
Business address
Circular Road
Larne
Co. Antrim
BT40 3AB
Bankers
Ulster Bank Limited
37 High Street
Carrickfergus
BT38 7AN
Solicitors
Collins Solicitors
29 New Street
Randalstown
BT41 3AF
ROAD TRUCKS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 26
ROAD TRUCKS 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 company’s key performance indicators are as follows:
Overall turnover increased by 35% year on year, with a rise of almost 46% in new vehicle turnover; the result of an increase in sales volume coupled with price increases implemented by the manufacturer. In addition, parts sales increased by 23%, and there was an uplift of 40% in workshop sales.
Due to restrictions in the supply of new vehicles a stock allocation model was introduced by our supplier, and consequently, new units remained in stock for longer than under normal trading conditions. Standard ordering practices have now been restored.
Used vehicle market conditions changed significantly from the previous year resulting in a decrease in sales volume and margin, and the necessity to put a stock provision in place at year end.
As a consequence of increased living costs, it was essential to increase wages and salaries across the board during the year, to ensure retention of our valued staff. This is an area which we continue to monitor closely. Recruitment of skilled technicians remains a challenge due to a shortage in the industry, but we continue to invest in our apprenticeship programme.
As in previous years significant expenditure was incurred in 2023 in order to maintain our premises and equipment to the high standards required for a Scania franchise. Maintenance work to the exterior of our premises has been ongoing in 2024.
In terms of future developments, the focus is on driving the shift to sustainable transport. Significant investment will be required in terms of site adaptations and staff training in the coming years to accommodate the shift to Battery Electric Vehicles (BEV).
We continue to operate in difficult market conditions, but we strive for excellence in customer service to remain competitive, and we retain adequate reserves in the company to take advantage of future opportunities.
S Russell
Director
10 September 2024
ROAD TRUCKS 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 continued to be that of distribution, repair and servicing of Scania trucks.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
J Marks
S Russell
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Future developments
The directors expect there to be no material change in the company's activities in the near future.
Auditor
Falconer Stewart were appointed auditor to the company 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
(a) so far as the directors are aware, there is no relevant audit information of which the company's auditors are unaware, and
(b) they have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information.
On behalf of the board
S Russell
Director
10 September 2024
ROAD TRUCKS 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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
ROAD TRUCKS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ROAD TRUCKS LIMITED
- 4 -
Opinion
We have audited the financial statements of Road Trucks Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
ROAD TRUCKS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ROAD TRUCKS LIMITED
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
ROAD TRUCKS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ROAD TRUCKS LIMITED
- 6 -
The extent to which the audit was considered capable of detecting irregularies, including fraud
Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, to perform audit procedures to help identify instances of non-compliance with other laws and regulations that may have a material effect on the financial statements, and to respond appropriately to identified or suspected non-compliance with laws and regulations identified during the audit.
In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud through designing and implementing appropriate responses and to respond appropriately to fraud or suspected fraud identified during the audit.
However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conduced in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:
obtained an understanding of the nature of the industry and sector, including the legal and regulatory frameworks that the company operated in and how the company is complying with the legal and regulatory frameworks;
inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;
discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud.
As a result of these procedures we consider the most significant laws and regulations that have a direct impact on the financial statements are FRS102 and compliance with Companies Act 2006 and Tax compliance regulations and government grant income. We performed audit procedures to detect non-compliances which may have a material impact on the financial statements which included, reviewing financial statement disclosures, completion of disclosure checklists to identify areas of non-compliance, inspecting correspondence with local tax authorities and evaluating advice obtained from external tax advisors.
The most significant laws and regulations that have an indirect impact on the financial statements are those in relation to health and safety and employment law. We performed audit procedures to inquire of management and those charged with governance whether the company is in compliance with these laws and regulations and inspected correspondence with the relevant authorities.
The audit engagement team identified the risk of management override of controls, revenue recognition and stock provisioning as areas where the financial statements were most susceptible to material misstatement due to fraud. Audit procedures performed included but were not limited to testing entries and other adjustments and evaluating the business rationale in relation to significant, unusual transactions and transactions entered into outside the normal course of business. Audit procedures performed over the revenue recognition included testing the operating effectiveness of controls, performing cut off testing, analytical review and tests of detail to cover all revenue assertions. Procedures performed over stock provisioning included re-calculation of the provision based on the provision methodology for reasonableness, challenging judgements and estimates applied in the methodology adopted in establishing stock provisions.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Councils website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
ROAD TRUCKS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ROAD TRUCKS LIMITED
- 7 -
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.
Michael J Crooks (Senior Statutory Auditor)
For and on behalf of Falconer Stewart Chartered Accountants
10 September 2024
Chartered Accountants
Statutory Auditor
248 Upper Newtownards Road
Belfast
BT4 3EU
ROAD TRUCKS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
2
49,999,513
37,002,466
Cost of sales
(46,033,167)
(33,089,438)
Gross profit
3,966,346
3,913,028
Administrative expenses
(1,318,203)
(1,055,739)
Other operating income
188,600
158,036
Operating profit
3
2,836,743
3,015,325
Interest receivable and similar income
6
68,008
11,937
Interest payable and similar expenses
7
(977)
Profit before taxation
2,903,774
3,027,262
Tax on profit
8
(699,977)
(593,261)
Profit for the financial year
2,203,797
2,434,001
The profit and loss account has been prepared on the basis that all operations are continuing operations.
ROAD TRUCKS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
£
£
Profit for the year
2,203,797
2,434,001
Other comprehensive income
-
-
Total comprehensive income for the year
2,203,797
2,434,001
ROAD TRUCKS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
460,130
304,232
Investment properties
10
715,000
715,000
Investments
11
600,000
600,000
1,775,130
1,619,232
Current assets
Stocks
12
20,323,180
13,417,200
Debtors
13
4,105,792
2,593,607
Cash at bank and in hand
1,624,099
4,441,100
26,053,071
20,451,907
Creditors: amounts falling due within one year
14
(9,024,116)
(5,517,561)
Net current assets
17,028,955
14,934,346
Total assets less current liabilities
18,804,085
16,553,578
Provisions for liabilities
Deferred tax liability
16
153,291
106,581
(153,291)
(106,581)
Net assets
18,650,794
16,446,997
Capital and reserves
Called up share capital
18
45,000
45,000
Profit and loss reserves
18,605,794
16,401,997
Total equity
18,650,794
16,446,997
The financial statements were approved by the board of directors and authorised for issue on 10 September 2024 and are signed on its behalf by:
J Marks
S Russell
Director
Director
Company Registration No. NI010084
ROAD TRUCKS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
45,000
13,967,996
14,012,996
Year ended 31 December 2022:
Profit and total comprehensive income
-
2,434,001
2,434,001
Balance at 31 December 2022
45,000
16,401,997
16,446,997
Year ended 31 December 2023:
Profit and total comprehensive income
-
2,203,797
2,203,797
Balance at 31 December 2023
45,000
18,605,794
18,650,794
ROAD TRUCKS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
22
(1,857,974)
(2,865,120)
Interest paid
(865)
Corporation tax paid
(774,104)
(614,337)
Net cash outflow from operating activities
(2,632,943)
(3,479,457)
Investing activities
Purchase of tangible fixed assets
(279,866)
(18,260)
Proceeds from disposal of tangible fixed assets
27,833
1,000
Interest received
67,975
11,744
Net cash used in investing activities
(184,058)
(5,516)
Net decrease in cash and cash equivalents
(2,817,001)
(3,484,973)
Cash and cash equivalents at beginning of year
4,441,100
7,926,073
Cash and cash equivalents at end of year
1,624,099
4,441,100
ROAD TRUCKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
1
Accounting policies
Company information
Road Trucks Limited is a private company limited by shares incorporated in Northern Ireland. The registered office is Circular Road, Larne, Co. Antrim, BT40 3AB.
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
Going concern
Atruet 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.
1.3
Turnover
Turnover represents amounts receivable for goods and services net of VAT and trade discounts.
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.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Buildings
2% per annum straight line
Land & buildings Leasehold
100% in current year
Plant & machinery
10% - 33.33% per annum straight line
Fixtures, fittings & equipment
20% - 33.33% per annum straight line
Motor vehicles
20% - 50% 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 credited or charged to profit or loss.
1.5
Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.
ROAD TRUCKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.6
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. 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 company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried in at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.8
Stocks
Stock and work in progress are valued at the lower of cost and net realisable value. Stock of vehicles are valued at purchase cost less provisions as considered necessary. Parts stock is valued at average cost after allowing for obsolete items. Replacement cost of parts stock is not believed to be materially different than cost, however replacement of vehicles would be subject to price variances for new models.
1.9
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.
ROAD TRUCKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.10
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
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.
ROAD TRUCKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.11
Compound instruments
The component parts of compound instruments issued by the company 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.
1.12
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.
1.13
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
ROAD TRUCKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.14
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.15
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 employees' 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.
1.16
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.17
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.
ROAD TRUCKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
2
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover
Sale of vehicles
37,701,846
27,299,532
Workshop and parts sales
11,826,817
9,349,352
Other income
470,850
353,582
49,999,513
37,002,466
ROAD TRUCKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Turnover and other revenue
(Continued)
- 19 -
2023
2022
£
£
Other significant revenue
Interest income
68,008
11,937
Sundry income
188,600
158,036
Turnover analysed by geographical market
2023
2022
£
£
UK
49,831,741
36,798,259
Other EU
167,772
204,207
49,999,513
37,002,466
3
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditors for the audit of the company's financial statements
10,250
11,950
Depreciation of owned tangible fixed assets
75,137
67,551
Profit on disposal of tangible fixed assets
(10,833)
(8,000)
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administration
5
5
Workshop and parts
44
42
Sales
5
4
54
51
ROAD TRUCKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
4
Employees
(Continued)
- 20 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,149,484
1,959,015
Social security costs
223,097
215,382
Pension costs
102,738
115,854
2,475,319
2,290,251
5
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
182,920
169,180
Company pension contributions to defined contribution schemes
62,233
82,040
245,153
251,220
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).
6
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
62,255
11,922
Other interest income
5,753
15
Total income
68,008
11,937
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
62,255
11,922
7
Interest payable and similar expenses
2023
2022
£
£
Other finance costs:
Other interest
977
ROAD TRUCKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
653,267
574,104
Deferred tax
Origination and reversal of timing differences
46,710
19,157
Total tax charge
699,977
593,261
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
2,903,774
3,027,262
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
682,968
575,180
Tax effect of expenses that are not deductible in determining taxable profit
229
108
Unutilised tax losses carried forward
8,406
Depreciation on assets not qualifying for tax allowances
360
291
Other
(38,696)
(1,475)
Deferred tax adjustment
46,710
19,157
Taxation charge for the year
699,977
593,261
ROAD TRUCKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
9
Tangible fixed assets
Buildings
Land & buildings Leasehold
Plant & machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 January 2023
81,558
15,980
605,584
129,567
374,385
1,207,074
Additions
63,831
13,200
164,004
241,035
Disposals
(137,698)
(23,867)
(26,150)
(187,715)
At 31 December 2023
81,558
15,980
531,717
118,900
512,239
1,260,394
Depreciation and impairment
At 1 January 2023
39,811
15,980
534,977
127,311
184,763
902,842
Depreciation charged in the year
1,529
22,185
3,356
48,067
75,137
Eliminated in respect of disposals
(137,698)
(23,867)
(16,150)
(177,715)
At 31 December 2023
41,340
15,980
419,464
106,800
216,680
800,264
Carrying amount
At 31 December 2023
40,218
112,253
12,100
295,559
460,130
At 31 December 2022
41,747
70,607
2,256
189,622
304,232
ROAD TRUCKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
10
Investment property
2023
£
Fair value
At 1 January 2023 and 31 December 2023
715,000
Investment property comprises two apartments and a small parcel of land. The fair value of the apartments has been arrived at on the basis of a valuation carried out by Colin Graham Residential in 2021. The directors do not believe there to be any material change in value of these investments.
11
Fixed asset investments
2023
2022
£
£
Unlisted investments
600,000
600,000
12
Stocks
2023
2022
£
£
Vehicle stock
18,886,465
12,099,669
Parts stock
1,436,715
1,317,531
20,323,180
13,417,200
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,393,161
2,039,532
Other debtors
1,639,145
494,329
Prepayments and accrued income
73,486
59,746
4,105,792
2,593,607
ROAD TRUCKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Loan stock
15
2,500,000
2,500,000
Trade creditors
4,226,002
1,071,978
Corporation tax
253,379
374,104
Other taxation and social security
83,024
61,590
Other creditors
69,933
45,067
Accruals and deferred income
1,891,778
1,464,822
9,024,116
5,517,561
15
Loan stock
2023
2022
£
£
Liability
2,500,000
2,500,000
16
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
96,367
53,072
Investment property
56,924
53,509
153,291
106,581
The deferred tax liability in respect of accelerated capital allowances set out above is expected to reverse. The deferred tax liability in respect of investment property is not expected to materialise in the near future.
17
Retirement benefit schemes
Defined contribution schemes
The charge to the profit and loss in respect of defined contribution schemes was £102,738 (2022 £115,854).
ROAD TRUCKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
45,000
45,000
45,000
45,000
19
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
-
34,945
20
Related party transactions
Amounts owed to related parties
A total of £2,314,772 was outstanding at the reporting end date.
21
Controlling party
The ultimate controlling party is Mr Sam Marks.
22
Cash absorbed by operations
2023
2022
£
£
Profit for the year after tax
2,203,797
2,434,001
Adjustments for:
Taxation charged
699,977
593,261
Finance costs
977
Investment income
(68,008)
(11,937)
Gain on disposal of tangible fixed assets
(10,833)
(8,000)
Depreciation and impairment of tangible fixed assets
75,137
67,551
Movements in working capital:
Increase in stocks
(6,905,980)
(7,644,170)
(Increase)/decrease in debtors
(1,512,152)
1,545,186
Increase in creditors
3,659,111
158,988
Cash absorbed by operations
(1,857,974)
(2,865,120)
ROAD TRUCKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
23
Analysis of changes in net funds/(debt)
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
4,441,100
(2,817,001)
1,624,099
Convertible loan notes
(2,500,000)
-
(2,500,000)
1,941,100
(2,817,001)
(875,901)
ROAD TRUCKS LIMITED
MANAGEMENT INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2023
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