Company registration number 03979963 (England and Wales)
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
COMPANY INFORMATION
Directors
J M Doughty
C C C Doughty
S Brown
N Ashraf
(Appointed 4 April 2023)
Secretary
J M Doughty
Company number
03979963
Registered office
Acumen House
Park Circle
Tithe Barn Way
Swan Valley
Northampton
NN4 9BH
Auditor
Ashgates Corporate Services Limited
5 Prospect Place
Millennium Way
Pride Park
Derby
DE24 8HG
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of income and retained earnings
8
Balance sheet
9
Notes to the financial statements
10 - 22
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -
The directors present the strategic report for the year ended 31 March 2023.
Principal activities
The principal activity of the company continued to be that of freight transport.
Review of the business
The results for the year are shown on page 8 of the financial statements.
The directors are very pleased to report an increase in turnover of £4,355,475 (44%) on the prior year. The company has been able to take advantage of a number of opportunities which have helped drive this increase.
These new opportunities have also helped drive an increase in gross profit margin of 20.3% compared to 7.1% last year which is especially pleasing.
Whilst administration costs have increased compared to the prior year these are in line with plans and expectations that were set.
The reported operating profit of £2,047,997 compared to £346,785 last year is a fantastic achievement by the company.
The balance sheet on page 9 again shows a much-improved position. Cash reserves are healthy at £605,025 and the net current asset position has improved again to £303,539.
Following the results achieved this year the company has moved from a net liability position to a net asset position of £976,264.
Whilst there have been a number of challenges in the industry in recent times with Covid, worldwide microchip shortages, driver shortages the company has done well to come through all of these and the directors are pleased with results that the company has been able to achieve and look forward to the future.
Principal risks and uncertainties
Management continually monitor the key risks facing the company, together with assessing the controls used for managing these risks. The board of directors formally reviews and documents the principal risks facing the business at least annually.
Microchip shortage
Since the spring of 2021 all UK automotive manufacturers (and a lot of other sectors) have been affected, to varying degrees, by a global shortage of microchips which is a knock-on effect from the Covid 19 pandemic. As an automotive logistics business, all the company’s activities are impacted by this reduced production to some extent. Although the situation is now easing, the directors will continue to take steps to lessen the financial impact of this issue until the point at which there is a full return to normal trading.
Driver Shortages
As has been well publicised, there is an acute shortage of HGV drivers in the UK, which has put significant upward pressure on wages. As a logistics company the business cannot operate and service its customers without experienced drivers, so the directors have resolved to continue to pay competitive market rates and when contractually possible, pass these increased costs on to customers.
Legislative
The company has systems and procedures in place to ensure compliance with, and to manage, the impact of
changes in Government legislation such as the Working Time Directive, TUPE, fuel duty, vehicle operating
procedures, environmental and vehicle emission requirements.
Financial and Liquidity
The company's forecasts and projections show that the company will be able to operate within its current facilities for a period of at least the next 12 months. Management continues to monitor and control working capital and capital expenditure requirements very closely.
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
Key performance indicators
The directors review internal management accounts on a monthly basis and consider their detailed review of operating margins and compliance as the best indicator of performance and position of the business.
Future Developments
The directors aim to continue in the company’s traditional market of vehicle delivery logistics but are also well placed to take advantage of new opportunities available. They believe there will be further good opportunities to further develop profitably, with a modern reliable fleet and a stable retained workforce.
Approved by the board and signed on its behalf by
C C C Doughty
Director
10 November 2023
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 March 2023.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
J M Doughty
C C C Doughty
S Brown
R Waring
(Resigned 14 April 2023)
N Ashraf
(Appointed 4 April 2023)
Financial instruments
Liquidity risk
In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the company uses a mixture of long-term and short-term debt finance.
Credit risk
The company's principal financial assets are bank balances and cash, trade and other receivables.
The amounts presented in the balance sheet are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified evidence of a reduction in the recoverability of the cash flows.
The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit-rating agencies.
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.
Approved by the board and signed on its behalf by
C C C Doughty
Director
10 November 2023
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
- 4 -
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.
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ACUMEN AUTOMOTIVE LOGISTICS LIMITED
- 5 -
Opinion
We have audited the financial statements of Acumen Automotive Logistics Limited (the 'company') for the year ended 31 March 2023 which comprise the statement of income and retained earnings, the balance sheet 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 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.
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ACUMEN AUTOMOTIVE LOGISTICS LIMITED
- 6 -
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 or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
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.
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 are not responsible for preventing irregularities. Our approach to detecting irregularities included, but was not limited to, the following:
• obtaining an understanding of the legal and regulatory framework applicable to the entity and how the entity is complying with that framework;
• obtaining an understanding of the entity's policies and procedures and how the entity has complied with these, through discussions and walkthrough testing;
• obtaining an understanding of the entity's risk assessment process, including the risk of fraud;
• enquiring of management as to actual and potential fraud, litigation and claims;
• designing our audit procedures to respond to our risk assessment;
• performing audit testing over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness and evaluating the business rationale of significant transactions outside the normal course of business;
• assessing whether judgements and assumptions made in determining the accounting estimates set out in note 2 were indicative of potential bias; and
• performing analytical procedures to identify any large, unusual or unexpected relationships.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ACUMEN AUTOMOTIVE LOGISTICS LIMITED
- 7 -
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Gavin Robert Booth (Senior Statutory Auditor)
For and on behalf of Ashgates Corporate Services Limited
Statutory Auditor
5 Prospect Place
Millennium Way
Pride Park
Derby
DE24 8HG
10 November 2023
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MARCH 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
14,209,849
9,854,374
Cost of sales
(11,319,483)
(9,152,116)
Gross profit
2,890,366
702,258
Administrative expenses
(892,369)
(427,650)
Other operating income
3
50,000
72,177
Operating profit
4
2,047,997
346,785
Interest payable and similar expenses
7
(117,514)
(96,338)
Profit before taxation
1,930,483
250,447
Tax on profit
8
(281,737)
(29,554)
Profit for the financial year
1,648,746
220,893
Retained earnings brought forward
(222,486)
(443,379)
Dividends
9
(450,000)
Retained earnings carried forward
976,260
(222,486)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
3,102,188
2,734,597
Current assets
Debtors
11
4,208,442
2,224,009
Cash at bank and in hand
605,025
370,565
4,813,467
2,594,574
Creditors: amounts falling due within one year
12
(4,509,928)
(2,456,678)
Net current assets
303,539
137,896
Total assets less current liabilities
3,405,727
2,872,493
Creditors: amounts falling due after more than one year
13
(2,054,001)
(3,001,250)
Provisions for liabilities
Deferred tax liability
17
375,462
93,725
(375,462)
(93,725)
Net assets/(liabilities)
976,264
(222,482)
Capital and reserves
Called up share capital
20
4
4
Profit and loss reserves
976,260
(222,486)
Total equity
976,264
(222,482)
The financial statements were approved by the board of directors and authorised for issue on 10 November 2023 and are signed on its behalf by:
C C C Doughty
Director
Company Registration No. 03979963
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 10 -
1
Accounting policies
Company information
Acumen Automotive Logistics Limited is a private company limited by shares incorporated in England and Wales. The registered office is Acumen House, Park Circle, Tithe Barn Way, Swan Valley, Northampton, NN4 9BH.
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:
The financial statements of the company are consolidated in the financial statements of Acumen Logistics Group Holdings Limited. These consolidated financial statements are available upon request from Companies House, Crown Way, Maindy, Cardiff, CF14 3UZ.
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 is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts.
Sales are recognised in the accounting period in which the service is rendered, by reference to completion of the specific transaction and from contracts for the provision of services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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.
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 11 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and machinery
2 - 10 years on cost
Fixtures, fittings and equipment
2 - 5 years on cost
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
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 at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
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.
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 12 -
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.
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.
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 13 -
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.
1.7
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.
1.8
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.
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 14 -
1.9
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.10
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.11
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 15 -
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.
Estimating value in use
Where an indication of impairment exists the directors will carry out an impairment review to determine the recoverable amount, which is the higher of fair value less cost to sell and value in use. The value in use calculation requires the directors to estimate the future cash flows expected to arise from the asset or the cash generating unit and a suitable discount rate in order to calculate present value.
Recoverability of receivables
The company establishes a provision for receivables that are estimated not to be recoverable. When assessing recoverability the directors consider factors such as the ageing of receivables, past experience of recoverability, and the credit profile of individual or groups of customers.
Determining residual values and useful economic life of tangible fixed assets (property, plant and equipment)
The company depreciates tangible assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management. The actual lives of these assets can vary depending on a variety of factors, including technological innovation, product life cycles and maintenance programs.
Judgment is applied by management when determining the residual values for tangible fixed assets. When determining the residual value management aim to assess the amount that the company would currently obtain for the disposal of the asset, if it were already of the condition expected at.
3
Turnover and other revenue
The analysis of the company's revenue for the year from continuing operations is as follows:
2023
2022
£
£
Turnover analysed by class of business
Transport services
14,209,849
9,854,374
2023
2022
£
£
Turnover analysed by geographical market
UK
14,209,849
9,854,374
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
3
Turnover and other revenue
(Continued)
- 16 -
2023
2022
£
£
Other operating income
Management charge income
50,000
50,000
Government grants
-
22,177
Government grants received relates to income received under the Coronavirus Job Retention Scheme.
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
-
(22,177)
Depreciation of owned tangible fixed assets
838,055
743,592
Profit on disposal of tangible fixed assets
(61,259)
(11,266)
Lease expense - plant and machinery
787,470
625,521
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
9,900
9,000
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Operational
54
52
Administration and support
22
16
Total
76
68
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,842,344
2,532,859
Social security costs
315,128
262,897
Pension costs
62,790
51,649
3,220,262
2,847,405
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 17 -
7
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
20,295
6,053
Interest on finance leases and hire purchase contracts
97,219
90,285
117,514
96,338
8
Taxation
2023
2022
£
£
Deferred tax
Origination and reversal of timing differences
281,737
29,554
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
1,930,483
250,447
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
366,792
47,585
Tax effect of expenses that are not deductible in determining taxable profit
(585)
2,327
Group relief claimed
(139,147)
(30,983)
Tax decrease from effect of capital allowances and depreciation
(194,408)
(18,928)
Brought forward tax losses utilised
(32,652)
Deferred tax arising from origination and reversal of timing differences
281,737
6,905
Deferred tax expense relating to changes in tax rates or laws
22,648
Taxation charge for the year
281,737
29,554
9
Dividends
2023
2022
£
£
Dividend paid
450,000
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 18 -
10
Tangible fixed assets
Plant and machinery
Fixtures, fittings and equipment
Total
£
£
£
Cost
At 1 April 2022
4,870,820
144,125
5,014,945
Additions
1,231,411
1,231,411
Disposals
(216,421)
(216,421)
At 31 March 2023
5,885,810
144,125
6,029,935
Depreciation and impairment
At 1 April 2022
2,156,996
123,352
2,280,348
Depreciation charged in the year
826,137
11,918
838,055
Eliminated in respect of disposals
(190,656)
(190,656)
At 31 March 2023
2,792,477
135,270
2,927,747
Carrying amount
At 31 March 2023
3,093,333
8,855
3,102,188
At 31 March 2022
2,713,824
20,773
2,734,597
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Plant and machinery
2,773,954
2,625,936
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
3,588,251
1,481,487
Amounts owed by group undertakings
255,346
358,732
Other debtors
46,609
33,583
Prepayments and accrued income
318,236
350,207
4,208,442
2,224,009
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 19 -
12
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Loans and borrowings
14
862,981
647,440
Trade creditors
751,271
517,850
Amounts owed to group undertakings
1,702,915
Taxation and social security
284,575
271,289
Other creditors
680,980
854,291
Accruals and deferred income
227,206
165,808
4,509,928
2,456,678
The company has access to group financing facilities with Barclays Bank Plc of up to £5,400,000. At the reporting date the company had drawn down £616,921 (2022 - £777,976) under the facility. This liability is included in other creditors.
All bank facilities are secured by virtue of a fixed and floating charge over the assets of the company and also an unlimited cross guarantee from certain other members of the same group.
13
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
15
1,554,001
1,705,744
Amounts owed to group undertakings
500,000
1,280,743
Other creditors
14,763
2,054,001
3,001,250
14
Loans and borrowings
2023
2022
£
£
Hire purchase and finance lease liabilities
2,416,982
2,353,184
Payable within one year
862,981
647,440
Payable after one year
1,554,001
1,705,744
Hire purchase and finance lease liabilities are secured against the related asset. The liability at the balance sheet date is £2,416,982 (2022 - £2,353,184).
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 20 -
15
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
1,041,122
834,447
In two to five years
1,810,920
1,654,984
2,852,042
2,489,431
Less: future finance charges
(435,060)
(136,247)
2,416,982
2,353,184
16
Provisions for liabilities
2023
2022
£
£
Deferred tax liabilities
17
375,462
93,725
375,462
93,725
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
375,462
178,037
Tax losses
-
(84,312)
375,462
93,725
2023
Movements in the year:
£
Liability at 1 April 2022
93,725
Charge to profit or loss
281,737
Liability at 31 March 2023
375,462
The amount of the net reversal of deferred tax assets and deferred tax liabilities expected to occur during the year beginning after the reporting period is £126,005 (2022 - £87,087).
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 21 -
18
Government grants
Government grants received, included within other operating income, relate to the Coronavirus Job Retention Scheme.
The amount of grants recognised in the financial statements was £nil (2022 - £22,177).
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
62,790
51,649
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.
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
4
4
4
4
21
Reserves
Profit and loss reserve
The profit and loss account represents cumulative profits and losses net of dividends and other adjustments.
22
Financial commitments, guarantees and contingent liabilities
The company has entered into a cross guarantee arrangement with its bankers to secure the liabilities of related companies. The contingent liability as at 31 March 2023 is £821,923 (2022 - £1,085,021). The future outcome is dependent on the performance of the individual companies concerned. However the directors do not expect any liability to crystalise.
23
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:
2023
2022
£
£
Within one year
278,135
331,695
Between two and five years
278,135
278,135
609,830
ACUMEN AUTOMOTIVE LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 22 -
24
Related party transactions
Transactions with related parties
During the year the company made sales of £357,950 (2022 - £324,086), received management charges of £50,000 (2022 - £50,000) and made purchases of £833,559 (2022 - £879,198) from such related parties. At the balance sheet date the amount due from/(to) these related parties amounted to £225,346 (2022 - £104,251).
The company is a wholly-owned member of Acumen Logistics Group Limited and as such has taken advantage of the exemption permitted by Section 33 Related Party Disclosures, not to provide disclosures of transactions entered into with other wholly-owned members of the group.
25
Ultimate controlling party
The parent of the largest and smallest group in which these financial statements are consolidated is Acumen Logistics Group Holdings Limited, incorporated in England.
The address of Acumen Logistics Group Holdings Limited is:
Acumen House Park Circle, Tithe Barn Way, Swan Valley, Northampton, United Kingdom, NN4 9BH
These financial statements are available upon request from Companies House, Crown Way, Maindy, Cardiff, CF14 3UZ.
The ultimate controlling party is C C C Doughty.
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