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Registered number: 03974880
Mercian Logistics Limited
Financial statements
Information for filing with the registrar
For the Year Ended 31 December 2024
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Mercian Logistics Limited
Registered number: 03974880
Balance Sheet
As at 31 December 2024
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The company has opted not to file the statement of income and retained earnings in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 25 September 2025.
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B Chaing
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The notes on pages 2 to 11 form part of these financial statements.
Page 1
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Mercian Logistics Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
Alhambra House
9 St Michael's Road
Croydon
CR0 2ZD
The address of its principal place of business is:
Unit 1H
Thorn Business Park
Hereford
HR2 6JT
2.Accounting policies
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Summary of significant accounting policies and key accounting estimates
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The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
These financial statements were prepared in accordance with Financial Reporting Standard 102 Section 1A - 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006.
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Basis of preparation of financial statements
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These financial statements have been prepared using the historical cost convention except that as
disclosed in the accounting policies certain items are shown at fair value.
The financial statements are presented in sterling which is the functional currency of the company
and rounded to the nearest £.
Page 2
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Mercian Logistics Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
2.Accounting policies (continued)
The director has considered carefully the appropriateness of adopting the going concern basis for
these accounts.
The Company is part of a larger group, headed by Chaing Equities Limited (the Group) and the ability of the Company to continue as a going concern is linked to the health of the Group in general. The Company and Group have three primary sources of funding:
∙Cash generated from the profits of the Group
∙Loans from shareholders / directors
∙Bank facilities
−Invoice Finance facilities from HSBC and ING – these provide working capital funding for many of the Group companies, particularly those in the UK and Netherlands
−Loan from Goldman Sachs guaranteed by the owners of the Group.
During the year the Group repaid the HSBC loan facilities in full using surplus cash and additional funding from the Goldman Sachs loan. The Goldman Sachs loan has since been repaid in full in 2025. Whilst the drawn balance on invoice finance facilities fluctuates according to need, those facilities have never been fully drawn and there is no expectation that they will be. This is supported by the forecasts, which assume no additional draw on these facilities and suggest that considerable headroom will remain available. Cash balances and availability against these facilities are actively monitored by Group management on a weekly basis.
The Group is reliant on the continued support of the shareholders / directors loans which are repayable on demand.
As a result of the repayment of the HSBC loan facilities in the year the Group no longer has to meet bank covenants.
In forming their conclusion, the director has prepared and sensitised a forecast model including monthly profit and loss accounts, balance sheets and cash flows for the period to 31 December 2026. The forecasts show continued strong levels of cash and continuing availability against invoice finance facilities. This also ignores any further mitigating actions that management could take if required, for example, further working capital management and/or cost reductions.
As a consequence, the director considers it appropriate to adopt the going concern basis for these accounts.
Page 3
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Mercian Logistics Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
2.Accounting policies (continued)
Turnover comprises the fair value of the consideration received or receivable for the provision of services in the ordinary course of the company’s activities. Turnover is shown net of value added tax, returns, rebates and discounts.
The company recognises revenue when:
the amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the company's activities.
Revenues are recognised in accordance with the terms of client contracts. Recognition is following provision of the service, depending on the terms of the contract.
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Leased assets: the company as lessee
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Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.
Finance costs are charged to profit or loss on an accruals basis.
Defined contribution pension plan
The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the company in independently administered funds.
Page 4
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Mercian Logistics Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
2.Accounting policies (continued)
The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates taxable income.
Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the company. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.
Exceptional items are transactions that fall within the ordinary activities of the company but are presented separately due to their size or incidence.
Tangible assets are stated in the balance sheet at cost or valuation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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Short-term leasehold property
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20-25% per annum straight line
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10-33% per annum straight line
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Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.
Page 5
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Mercian Logistics Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
2.Accounting policies (continued)
Trade debtors are amounts due from customers for merchandise sold in the ordinary course of business.
Trade debtors with no stated interest rate and receivable within one year are recorded at transaction price. Any losses arising from impairment are recognised in profit or loss in other administrative expenses.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors with no stated interest rate and payable within one year are recorded at transaction price.
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments.
Classification
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.
Recognition and measurement
Financial assets and financial liabilities are recognised when the company becomes a party to the
contractual provisions of the instrument.
All financial assets and liabilities are initially measured at transaction price (including transaction
costs), except for those financial assets classified at fair value through profit or loss, which are initially
measured at fair value (which is normally the transaction price excluding transaction costs), unless
the arrangement constitutes a financing transaction. If an arrangement constitutes a financing
transaction, the financial asset or liability is measured at the present value of the future payments
discounted at a market rate of interest for a similar debt instrument.
Financial assets and liabilities are only offset in the balance sheet when, and only when, there exists
a legally enforceable right to set off the recognised amounts and the company intends either to settle
on a net basis, or to realise the asset and settle the liability simultaneously.
Debt instruments which meet the conditions set out by FRS 102 to be classified as basic financial
instruments are subsequently measured at amortised cost using the effective interest method.
Debt instruments that have no stated interest rate (and do not constitute a financing transaction) and
are classified as payable or receivable within one year are initially measured at the undiscounted
amount of the cash or other consideration expected to be paid or received, net of impairment.
Page 6
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Mercian Logistics Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
2.Accounting policies (continued)
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Financial instruments (continued)
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Impairment
Assets not measured at fair value are reviewed for any indication that the asset may be impaired at
each balance sheet date. If such indication exists, the recoverable amount of the asset, or the asset’s
cash generating unit, is estimated and compared to the carrying amount. Where the carrying amount
exceeds its recoverable amount, an impairment loss is recognised in profit or loss unless the asset is
carried at a revalued amount where the impairment loss is a revaluation decrease.
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The average monthly number of employees, including directors, during the year was 38 (2023 - 56).
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Page 7
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Mercian Logistics Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
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The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
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Page 8
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Mercian Logistics Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
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Amounts owed by group undertakings
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Prepayments and accrued income
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Obligations under finance lease and hire purchase contracts
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Accruals and deferred income
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Included within other creditors balance is an amount of £69,475 (2023: £248,940) in respect of the company's invoice discounting facility. This amount is secured by fixed and floating charges over the company's assets.
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Page 9
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Mercian Logistics Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
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Creditors: Amounts falling due after more than one year
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Net obligations under finance leases and hire purchase contracts
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Analysis of the maturity of loans is given below:
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Amounts falling due within one year
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Amounts falling due 2-5 years
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Hire purchase and finance leases
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Minimum lease payments under hire purchase fall due as follows:
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Allotted, called up and fully paid
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3 (2023 - 3) Ordinary shares of £1 each
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The total amount of contingencies not included in the balance sheet is £1,844,695 (2023: £9,479,427). The company has given cross guarantees to the group's bankers in respect of borrowings by certain group companies.
Page 10
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Mercian Logistics Limited
Notes to the Financial Statements
For the Year Ended 31 December 2024
The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £22,724 (2023: £26,616). Contributions totalling £5,269 (2023: £1,930) were payable to the fund at the balance sheet date and are included in creditors.
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Related party transactions
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Cathay Investments Limited
(Group company)
The company has given cross guarantees in respect of borrowings by Cathay Investments Limited and certain of its subsidiaries. The total amount of contingencies not included in the balance sheet is £131,937 (2023: £8,240,748).
3PL Resources Limited
(Group company)
The company was invoiced by 3PL Resources Limited for services and other charges totalling £222,687 (2023: £27,569). At the balance sheet date the amount owed to 3PL Resources Limited from the company was £141,155 (2023: £1,273).
The company has taken advantage of the exemption in Section 33 of FRS 102 'Related Party Disclosures' from disclosing transactions with other wholly owned members of the group.
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The company's immediate parent company is CAJ Mercian Holdings Limited, incorporated in England and Wales.
The ultimate parent company is Chaing Equities Limited, incorporated in England and Wales.
The most senior parent entity producing publicly available financial statements is Chaing Equities Limited. These financial statements are available upon request from Alhambra House, 9 St Michael's Road, Croydon, CR0 2ZD.
The ultimate controlling party is B Chaing, a director of the ultimate parent company, who with members of
his close family, controls the company as a result of controlling, directly or indirectly, the majority of the
issued share capital in the ultimate parent company.
The auditors' report on the financial statements for the year ended 31 December 2024 was unqualified.
The audit report was signed on 26 September 2025 by Graham Hunt BA FCA (Senior Statutory Auditor) on behalf of Kreston Reeves LLP.
Page 11
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