Company Registration No. SC032077 (Scotland)
CARNTYNE TRANSPORT COMPANY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
CARNTYNE TRANSPORT COMPANY LIMITED
COMPANY INFORMATION
Directors
A W Poulton
D Paterson
I M Russell
J G Russell
S J Wigfield
Secretary
S J Wigfield
Company number
SC032077
Registered office
440 Petershill Road
Springburn
Glasgow
United Kingdom
G21 4AA
Auditor
Johnston Carmichael LLP
227 West George Street
Glasgow
G2 2ND
CARNTYNE TRANSPORT COMPANY LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 25
CARNTYNE TRANSPORT COMPANY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -
The directors present the strategic report for the year ended 31 March 2024.
Principal activity
Our principal activity during the year was Road Freight Transport, in particular the transportation of bulk spirit, other liquids and packaging.
Fair review of the business
The business recorded net turnover of £42.67m (2023: £43.15m) and a profit before tax of £5.66m (2023: £6.49m). Across the past 12 months demand across our core markets has remained stable, we have inserted price increases across all key customers to offset increase in cost base driven by inflation.
Capital expenditure
The company continues to invest in equipment such as vehicles, tanks and trailers with expenditure for the year of £4.54m (2023: £4.63m).
Strategy
Our strategy remains one of sustainable growth, achievable through collaboration with key customers to maximise mutual business opportunities. We focus on being leaders in our field, requiring continual innovation built around providing customers with a quality service that is robust and reliable whilst offering a flexible, cost-effective solution. Our level of success can only be determined by complete customer satisfaction, that we measure through clearly defined key operational performance indicators which we aim to surpass.
Our corporate strategy has the fundamental support of a clearly defined Health & Safety Policy that lies at the core of our operations. The directors apply and monitor a continuous improvement philosophy to risk, health and safety and the company's impact on the environment. All business areas are subject to rigorous and regular review.
Principal risks and uncertainties
Liquidity
The company manages its liquidity and cash flow risks by regular forward projection of performance and capital requirements. It seeks to minimise risk associated with input prices through a long term procurement strategy and in collaboration with its customers through transparency of pricing.
Trade Credit & Financing
Credit risk is monitored by way of in-house credit control functions and regular external credit checking. The company's financial instruments comprise hire purchase finance, bank borrowing through overdraft and long term loan, and supplier financing arrangements made available through key customers. Interest rate risk is not considered material to the fair value of these borrowings.
Currency, Interest & Fuel
With no currency exposure at present, the principal financial risks would be associated with interest rates and fuel prices. At present, interest risk is not considered to be material and fuel price risk is managed through a combination of long term procurement strategy and industry-accepted, price adjustment mechanisms.
Customer Retention
The nature of the market that the company operates in, there are only a few competitors, the operations with key customers are well integrated which creates a barrier to exit on both sides.
Key performance indicators
Financial performance is measured in terms of turnover generation supported by profit margin targets and a minimum return on capital employed being achieved from each business unit. Operational performance is tailored to each customer's requirements but generally will be set to a minimum service level.
CARNTYNE TRANSPORT COMPANY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
S172 statement
The Board of Carntyne Transport Company Limited acknowledges its responsibility under section 172 (1) of the Companies Act 2006.
The act states that a director of a company must act in a way that he/she considers, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to various other stakeholder interests – below are the six key factors:
Stakeholder engagement 1. Shareholders Shareholders provide funds that help us run and grow our business and they expect a sustainable return. Operational and finance meetings are held with our shareholders, where we engage and exchange views. Formal chaired, minuted meetings are held monthly where strategic, operational and financial matters and reviewed and discussed, providing a platform for well-informed decision making. 2. Customers Our customers are our lifeblood whom we value highly. They provide the opportunities which provides gainful employment for our people and a return for our shareholders. Service to our customers is of prime importance, and we systematically seek feedback on how we are performing. We have regular meetings with our customers and engage in customer surveys. We also interact with our customers through framework agreements, tenders and call orders. 3. Our people Our people provide the external services to our customers and support each other in that common goal. We are passionate about nurturing a highly motivated, well-trained, team-orientated workforce. Health & safety is of paramount importance in our business. 4. Suppliers We fully support the collaboration with our suppliers as it reduces the risk in our supply chain and strengthens the platform from which we provide a service to our customers. We also interact with our suppliers through tenders, agreements and purchase orders. |
J G Russell
Director
26 November 2024
CARNTYNE TRANSPORT COMPANY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 March 2024.
Principal activities
The principal activity of the company is outlined within the strategic report.
Results and dividends
The profit for the year, after taxation, amounted to £4,196,057 (2023: £5,128,223).
A dividend of £2,000,000 (2023: £2,000,000) was approved for payment to the parent company in support of ongoing commitments, as indicated in the statement of changes in equity.
Going concern
The financial statements are prepared on a going concern basis following a detailed assessment of the company's ability to continue as a going concern by the directors. The assessment involved the preparation of detailed trading projections covering the period to December 2025, which demonstrate that the company will generate sufficient operating cash flows to meet its obligations as and when they fall due. In the unlikely event of a significant downturn in trading levels, the directors consider the company to have a number of reasonable plausible options to continue to meet its obligations as they fall due. On this basis, the directors are satisfied that they can continue to adopt the going concern basis of accounting in preparing the financial statements.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
A W Poulton
D Paterson
I M Russell
J G Russell
S J Wigfield
Employment of disabled persons
We accept applications for employment from disabled persons whose aptitudes meet the requirements of the job, with consideration given to special training or facility needs. Following employment, a career plan will be developed so as to maintain future opportunities for each disabled person. Similar arrangements, with suitable retraining, will be made for any employees who become disabled to allow them to perform work appropriate to their abilities.
Employee recruitment and engagement
In respect of advertising and applications for employment, we comply with the requirements of the Equality Act 2010. Carntyne continues to invest in a blend of youth and experience to complement the existing teams within the business.
We recognise the benefits of an engaged workforce and will ensure employees have the correct levels of investment in terms of training, and suitable, flexible reward packages.
Future developments
The company has chosen in accordance with Companies Act 2006, s.414C(11) to set out the company's strategic report information required by Large and Medium sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments.
Auditor
In accordance with the company's articles, a resolution proposing that Johnston Carmichael LLP be reappointed as auditor of the company will be put at a General Meeting.
CARNTYNE TRANSPORT COMPANY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
Energy and carbon report
From financial years beginning after 1 April 2019, large UK companies are required to report publicly on their global energy use and carbon emissions within their Directors’ Report. Although the company is eligible to make the necessary disclosures, exemption has been taken from including these within the company's own financial statements as the company is included within the disclosures made by its parent entity, John G. Russell (Transport) Limited.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
J G Russell
Director
26 November 2024
CARNTYNE TRANSPORT COMPANY LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 5 -
The directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 and 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;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
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.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
CARNTYNE TRANSPORT COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CARNTYNE TRANSPORT COMPANY LIMITED
- 6 -
Opinion
We have audited the financial statements of Carntyne Transport Company Limited (the 'company') for the year ended 31 March 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
Give a true and fair view of the state of the company's affairs as at 31 March 2024 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 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.
CARNTYNE TRANSPORT COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CARNTYNE TRANSPORT COMPANY LIMITED
- 7 -
Matters on which we are required to report by exception
In the light of our 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 in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
Adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
The financial statements are not in agreement with the accounting records and returns; or
Certain disclosures of remuneration specified by law are not made; or
We have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor 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 for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Extent to which the audit is considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:
We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.
All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
CARNTYNE TRANSPORT COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CARNTYNE TRANSPORT COMPANY LIMITED
- 8 -
Extent to which the audit is considered capable of detecting irregularities, including fraud (continued)
We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and parent company, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:
We gained an understanding of how the group is complying with these laws and regulations by making enquiries of management and those charged with governance. We corroborated these enquiries through our review of submitted returns, external inspections, relevant correspondence with regulatory bodies and board meeting minutes.
We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. In areas of the financial statements where the risks were considered to be higher, we performed procedures to address each identified risk. We identified a heightened fraud risk in relation to:
In addition to the above, the following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error:
Reviewing minutes of meetings of those charged with governance for reference to: breaches of laws and regulation or for any indication of any potential litigation and claims; and events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud;
Reviewing the level of and reasoning behind the group’s procurement of legal and professional services;
Performing audit work procedures over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing judgements made by management in their calculation of accounting estimates for potential management bias;
For each material revenue stream, we performed audit work procedures including a sample of transactions to supporting documentation to verify the cut-off of revenue. We sample tested manual journals to revenue and evaluated the business rationale to obtain evidence on the occurrence of the revenue;
Completion of appropriate checklists and use of our experience to assess the Company’s compliance with the Companies Act 2006; and
Agreement of the financial statement disclosures to supporting documentation.
Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, recognizing that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
CARNTYNE TRANSPORT COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CARNTYNE TRANSPORT COMPANY LIMITED
- 9 -
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 Hamilton (Senior Statutory Auditor)
For and on behalf of Johnston Carmichael LLP
26 November 2024
Chartered Accountants
Statutory Auditor
227 West George Street
Glasgow
G2 2ND
CARNTYNE TRANSPORT COMPANY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
2024
2023
Notes
£
£
Turnover
3
42,670,880
43,152,541
Staff costs
6
(17,228,533)
(15,217,890)
Other operating expenses
(19,663,181)
(21,403,384)
Operating profit
4
5,779,166
6,531,267
Interest payable and similar expenses
8
(119,666)
(45,487)
Profit before taxation
5,659,500
6,485,780
Tax on profit
9
(1,463,443)
(1,357,557)
Profit for the financial year
4,196,057
5,128,223
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
CARNTYNE TRANSPORT COMPANY LIMITED
BALANCE SHEET
AS AT 31 MARCH 2024
31 March 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
16,780,140
15,069,620
Current assets
Stocks
12
698,718
380,993
Debtors
13
13,402,717
10,797,027
Cash at bank and in hand
6,178,563
5,985,869
20,279,998
17,163,889
Creditors: amounts falling due within one year
14
(6,994,168)
(5,841,969)
Net current assets
13,285,830
11,321,920
Total assets less current liabilities
30,065,970
26,391,540
Creditors: amounts falling due after more than one year
15
(1,847,317)
(1,078,742)
Provisions for liabilities
Deferred tax liability
17
2,644,749
1,934,951
(2,644,749)
(1,934,951)
Net assets
25,573,904
23,377,847
Capital and reserves
Called up share capital
19
22,500
22,500
Capital redemption reserve
20
15,000
15,000
Profit and loss reserves
20
25,536,404
23,340,347
Total equity
25,573,904
23,377,847
The financial statements were approved by the board of directors and authorised for issue on 26 November 2024 and are signed on its behalf by:
J G Russell
Director
Company Registration No. SC032077
CARNTYNE TRANSPORT COMPANY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 12 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2022
22,500
15,000
20,212,124
20,249,624
Year ended 31 March 2023:
Profit and total comprehensive income for the year
-
-
5,128,223
5,128,223
Dividends
10
-
-
(2,000,000)
(2,000,000)
Balance at 31 March 2023
22,500
15,000
23,340,347
23,377,847
Year ended 31 March 2024:
Profit and total comprehensive income for the year
-
-
4,196,057
4,196,057
Dividends
10
-
-
(2,000,000)
(2,000,000)
Balance at 31 March 2024
22,500
15,000
25,536,404
25,573,904
CARNTYNE TRANSPORT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 13 -
1
Accounting policies
Company information
Carntyne Transport Company Limited is a private company limited by shares incorporated in Scotland. The registered office is 440 Petershill Road, Springburn, Glasgow, United Kingdom, G21 4AA.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements where applicable:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of John G. Russell (Transport) Limited. These consolidated financial statements are available from its registered office, Deanside Road, Hillington, Glasgow, G52 4XB.
1.2
Going concern
The financial statements are prepared on a going concern basis following a detailed assessment of the company's ability to continue as a going concern by the directors. The assessment involved the preparation of detailed trading projections covering the period to December 202true5, which demonstrate that the company will generate sufficient operating cash flows to meet its obligations as and when they fall due. In the unlikely event of a significant downturn in trading levels, the directors consider the company to have a number of reasonable plausible options to continue to meet its obligations as they fall due. On this basis, the directors are satisfied that they can continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover relates to income from road freight transport and is recognised on the occurrence of a critical event, such as delivery of goods.
Turnover is included at the fair value of the consideration received or receivable, 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.
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.
CARNTYNE TRANSPORT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
4% - 10% straight line
Plant and equipment
14% - 33% straight line
Motor vehicles
10% - 33% 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 the statement of comprehensive income.
1.5
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.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
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 the statement of comprehensive income. Reversals of impairment losses are also recognised in the statement of comprehensive income.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include certain 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.
CARNTYNE TRANSPORT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
Impairment of financial assets
Financial assets 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 the statement of comprehensive income.
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 the statement of comprehensive income.
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.
Basic financial liabilities
Basic financial liabilities, including certain creditors and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
CARNTYNE TRANSPORT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 16 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the statement of comprehensive income 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 statement of comprehensive income, 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
Defined contribution scheme
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Defined benefit scheme
The company is part of a group which operates a defined benefit scheme. The scheme has been closed to new members since 2004 and closed to future accruals since June 2010. The assets of the scheme are held separately from those of the group.
As there is no group contractual arrangement or stated policy charging an element of the net defined benefit cost to the company, no defined benefit balance is recognised in the company's balance sheet. Instead, the company accounts for its contributions to the group's scheme as a cost in the relevant period. The deficit of the scheme is held within the financial statements of John G. Russell (Transport) Limited, the company's parent undertaking. Further details of the scheme and the company's contributions in the year are outlined at note 18.
CARNTYNE TRANSPORT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 17 -
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 asset's 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 the statement of comprehensive income 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.
1.14
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 the statement of comprehensive income.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Useful lives of tangible fixed assets
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions and projected disposal values.
The carrying value of tangible fixed assets and depreciation charged in the year are outlined at note 11.
3
Turnover and other revenue
The whole of the company's turnover is attributable to road freight transport and related activities and arose within the United Kingdom.
CARNTYNE TRANSPORT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 18 -
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Depreciation of owned tangible fixed assets
2,184,486
1,867,824
Depreciation of tangible fixed assets held under finance leases
494,063
351,369
Profit on disposal of tangible fixed assets
(74,565)
(101,422)
Operating lease charges
1,174,746
1,239,933
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
20,070
18,720
For other services
All other non-audit services
2,230
7,438
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Drivers
143
137
Warehouse and yard handlers
88
85
Engineering
58
60
Office
44
40
Total
333
322
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
15,037,340
13,264,359
Social security costs
1,681,986
1,520,984
Pension costs
509,207
432,547
17,228,533
15,217,890
Further information on pension contributions can be found at note 18.
CARNTYNE TRANSPORT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
236,097
263,331
Company pension contributions to defined contribution schemes
25,825
24,018
261,922
287,349
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023: 1).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
130,221
128,772
Company pension contributions to defined contribution schemes
25,897
24,037
8
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
4,541
6,701
Interest on finance leases and hire purchase contracts
114,786
38,786
Other interest
339
119,666
45,487
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
765,065
356,184
Adjustments in respect of prior periods
(11,420)
726
Total current tax
753,645
356,910
Deferred tax
Origination and reversal of timing differences
711,299
728,260
Changes in tax rates
229,977
Adjustment in respect of prior periods
(1,501)
42,410
Total deferred tax
709,798
1,000,647
Total tax charge
1,463,443
1,357,557
CARNTYNE TRANSPORT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
9
Taxation
(Continued)
- 20 -
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:
2024
2023
£
£
Profit before taxation
5,659,500
6,485,780
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
1,414,875
1,232,298
Tax effect of expenses that are not deductible in determining taxable profit
8,912
9,855
Adjustments in respect of prior years
(11,420)
726
Effect of change in corporation tax rate
229,977
Deferred tax adjustments in respect of prior years
(1,501)
42,410
Fixed asset differences
52,577
(157,709)
Taxation charge for the year
1,463,443
1,357,557
A change in the UK Corporation tax rate to 25%, from 19%, took effect from 1 April 2023. Deferred tax has been calculated at 25%.
10
Dividends
2024
2023
£
£
Interim paid
2,000,000
2,000,000
CARNTYNE TRANSPORT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
11
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 April 2023
4,474,537
2,646,774
32,947,836
40,069,147
Additions
174,366
148,700
4,215,753
4,538,819
Disposals
(86,053)
(2,096,670)
(2,182,723)
At 31 March 2024
4,648,903
2,709,421
35,066,919
42,425,243
Depreciation and impairment
At 1 April 2023
2,239,687
2,101,130
20,658,710
24,999,527
Depreciation charged in the year
115,021
152,976
2,410,552
2,678,549
Eliminated in respect of disposals
(85,899)
(1,947,074)
(2,032,973)
At 31 March 2024
2,354,708
2,168,207
21,122,188
25,645,103
Carrying amount
At 31 March 2024
2,294,195
541,214
13,944,731
16,780,140
At 31 March 2023
2,234,850
545,644
12,289,126
15,069,620
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2024
2023
£
£
Motor vehicles
4,680,605
3,804,335
12
Stocks
2024
2023
£
£
Raw materials and consumables
621,630
329,899
Work in progress
77,088
51,094
698,718
380,993
CARNTYNE TRANSPORT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
12,124,400
10,019,319
Corporation tax recoverable
242,834
Amounts owed by group undertakings
347,573
233,833
Prepayments and accrued income
930,744
301,041
13,402,717
10,797,027
Amounts owed by group undertakings are interest free and repayable on demand.
14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
16
1,261,157
1,175,562
Trade creditors
2,609,925
1,990,335
Amounts owed to group undertakings
520,634
397,715
Corporation tax
304,316
Other taxation and social security
1,781,133
1,624,899
Other creditors
71,006
50,818
Accruals and deferred income
445,997
602,640
6,994,168
5,841,969
Amounts due to fellow group undertakings are interest free and payable on demand.
Obligations under finance leases are secured over the assets to which they relate.
15
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under finance leases
16
1,847,317
1,078,742
Obligations under finance leases are secured over the assets to which they relate.
CARNTYNE TRANSPORT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 23 -
16
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
1,261,156
1,175,562
In two to five years
1,847,318
1,078,742
3,108,474
2,254,304
Finance lease payments represent rentals payable by the company for certain motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
17
Deferred taxation
The following are the major deferred tax liabilities recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
2,654,398
1,942,005
Short term timing differences
(9,649)
(7,054)
2,644,749
1,934,951
2024
Movements in the year:
£
Liability at 1 April 2023
1,934,951
Charge to profit or loss
709,798
Liability at 31 March 2024
2,644,749
Short term timing differences outlined above are expected to reverse within 12 months.
CARNTYNE TRANSPORT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 24 -
18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
509,207
432,547
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
Contributions totalling £85,998 (2023: £90,839) were payable to the fund at the reporting date.
The company is also part of a group which operates a defined benefit scheme. This scheme has been closed to new members since 2004 and closed to future accruals from 5 June 2010. The assets of the scheme are held separately from the group. The company accounts for its contributions to this scheme as a defined contribution scheme. The surplus of the scheme at the year end, held within the John G. Russell (Transport) Limited financial statements is £1,824,000 (2023: £1,767,000).
19
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
22,500
22,500
22,500
22,500
20
Reserves
Capital redemption reserve
The capital redemption reserve contains pre John G. Russell (Transport) Limited acquisition share premium.
Profit and loss reserves
The profit and loss reserve includes all current and prior period retained profits and losses.
21
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
875,543
917,179
Between two and five years
204,692
1,080,235
1,080,235
1,997,414
22
Related party transactions
The company has taken advantage of the disclosure exemptions available under Section 33 of FRS 102 whereby it has not disclosed transactions entered into with any wholly-owned entity of the group.
CARNTYNE TRANSPORT COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 25 -
23
Ultimate controlling party
The largest and smallest group for which group accounts have been drawn up and the ultimate parent undertaking of the company is John G. Russell (Transport) Limited, a company whose registered office is Deanside Road, Hillington, Glasgow, G52 4XB. Copies of the consolidated financial statements can be obtained from the company's registered address.
The ultimate controlling party is Mr J G Russell, together with his wife Mrs I M Russell.
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