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Transcript of CAROUSEL LOGISTICS LIMITED - Amazon S3
" DocuSign Envelope ID: 7058DA87-52FA-4830-869F-5E9E99C74510
Registered number: 01908712
CAROUSEL LOGISTICS LIMITED
ANNUAL REPORTANDFINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER2019
*A9DQNSHS*
A30 16/09/2020 #163
COMPANIES HOUSE
WEDNESDAY
DocuSign Envelope ID: 7058DA87-52FA-4830-869F-5E9E99C74510
CAROUSELLOGISTICS LIMITED
COMPANY INFORMATION
Directors G A MartinM P MartinN J Ward
Registered number 01908712
Registered office 23 Kings Hill AvenueWest MallingKentME19 4UA
Trading Address Gateway CentreCastle RoadEurolinkSittingbourneKentME10 3RN
Independentauditor Grant Thornton UK LLPChartered Accountants & Statutory Auditor2nd FloorSt John's HouseHaslett Avenue West
CrawleyRH10 1HS
DocuSign Envelope ID: 7058DA87-52FA-4830-869F-5E9E99C74510
CAROUSELLOGISTICS LIMITED
CONTENTS
Page
Strategic Report 1-4
Directors' Report 5-6
Independent Auditor's Report 7-10
Statement of Income and Retained Earnings 11
Statementof Financial Position 12
Notesto the Financial Statements 13 - 32
DocuSign Envelope ID: 7058DA87-52FA-4830-869F-5E9E99C74510
CAROUSEL LOGISTICS LIMITED
STRATEGIC REPORTFOR THE YEAR ENDED 31 DECEMBER 2019
Introduction
The directors presenttheir strategic report for the year ended 31 December 2019.
Principal activities and overview
Carousel is a leading European servicelogistics specialist, focusing on high-performance industries. Agile andtechnology-led transport solutions offer dynamic collection and delivery flexibility whilst providing full visibility anddirect control to the customer. Carousel guarantees delivery precisely when, where, how and at the speed theirclients demand.
Carousel's quick to implement and easy to integrate service and technology platform connects customers to
highly dedicated experts who utilise a pan-European network of distribution partners to ensure the smooth flow
of parts and products. Services offered include: extensive first and final-mile delivery options; field engineer anddealer services; air and road line-hauls; in-night distribution; warehousing; forward stock locations and returnsmanagementsolutions.
Carousel is trusted by leading high performance industries with demanding spare parts and aftermarketrequirements. Carousel collaborates with their clients to establish the critical KPls that bring value to theircustomers and then we deliver measurably better logistics against them.
Business review
The company’s short, medium and long term strategy of continued investment in people, platform and customersatisfaction has resulted in another year of growth in both Turnover and EBITDA. The directors consider theresults for the year demonstrate another very successtul pertormance by the company.
2019 2018 Change Change£ £ £ %
Turnover 28,192,185 26,114,401 2,077,784 8
Operating profit 1,813,662 1,627,472 186,190 11
EBITDA 2,145,759 1,868,422 277,337 15
Cashat bank and in hand 576,715 2,296,189 (1,719,474) (75)
Acquisition
In March 2019 Carousel Logistics Ltd, acquired 100% of the share capital of BDA Assets and Investments DACand its subsidiaries. The deal strengthens Carousel's position across Europe, supporting its mission to becomethe number one choice for high performance industries in the high-value, time critical aftermarket and spareparts services sector.
The combined group now offers clients a wider service portfolio and through dedicated air-bridges an extendednetwork servicing the Netherlands, Ireland and the UK.
Page1
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CAROUSELLOGISTICS LIMITED
STRATEGIC REPORT (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER2019
Investment and technology
The Directors continue to recognise the importance of maintaining and continually developing a cutting-edge IT
platform which constantly improves the customer experience, 2019 saw further investment in Carousel’s serviceand technology platform, Gateway.
Key performanceindicators
The Directors consider EBITDA (defined as Earnings before Interest, Tax, Depreciation and Amortisation) to be
a key metric in assessing the performance of Carousel Logistics Ltd.
Onthe back of new business wins, the directors are delighted with the £277k (15%) increasein this metric.
Delighting clients is at the heart of everything that Carousel does and successin this area was measuredthrough ongoing customersatisfaction surveys and achievementof a net promoter score of 85. This result wascomplimented by an on-time delivery performance of 97.9%.
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CAROUSEL LOGISTICS LIMITED
STRATEGIC REPORT (CONTINUED)FOR THE YEAR ENDED 31 DECEMBER2019
Principal risks and uncertainties
CompetitionThe market in which the companyoperates is highly competitive. Through continual proactive management ofclient relationships and the group’s continued commitment to add value to its client’s businesses through theprovision of competitive yet outstanding service, Carousel Logistics Limited is able to keep client attrition to aminimum.
PartnerrelationshipsThe company’s success is based upon strong relationships with its key partners. These ensure the sustainable
provision of cost effective high quality services to meetits customer’s requirements. The company maintainsitsrelationship with its partners through regular proactive contact, appropriate contracts; ongoing monitoring offinancial health and service related key performance indicators.
EconomicAswith the majority of businesses the group is subject to the risk of an economic downturn, whetherin the UK orglobally. In response to this risk, senior management keep abreast of economic conditions and will modifymarketing and pricing strategies and adopt new productlines to reflect changing market conditions. The group’ssales strategy focuses on acquiring a spread of business across a wide range of sectors including: medical,retail, agricultural, technical, engineering and education, to mitigate the risk of a sector specific downturn.
BrexitThe Directors firmly believe that Brexit creates an opportunity and not a threat to Carousel regardless of whatform it takes.
The company has worked to position itself as a leader within the sector who can berelied upon to deliver agileand technologyled solutions as required byclients.
The Directors are working on a project to ensure a smooth Brexit transition for existing clients and one which
also identifies revenue generating opportunities for assisting new clients.
Financial risk managementobjectivesThe companyusesfinancial instruments, cash and various other items such as trade debtors and creditors that
arise directly from its operations. The main purpose of these financial instruments is to raise finance for thecompany's operations. The main risk arising from the company's financial instruments is credit risk. The
directors review and agree the policy for managing this risks and it is summarised below.
Liquidity riskThe company aims to mitigate liquidity risk by pro-actively managing operational cash generation and applyingrigorous credit control. The company also managesliquidity risk by ensuring the company has sufficient working
capital via the facilities in place with HSBC.
Credit riskThe company's principal financial assets are cash and trade debtors. The credit risk associated with cash islimited as the counterparts have high credit ratings assigned byinternational credit rating agencies. The principalrisk arises from the company's trade debtors. In order to manage credit risk, the directors set limits forcustomers based on a combination of payment history and third-party credit references. All clients and suppliersare monitored on a web-basedrisk tracker system on an ongoing basis andcredit limits are continually reviewedbythe credit controller in conjunction with financial performance, debt ageing andcollection history.
Covid-19 riskA new phenomenonofrisk in 2020 is that of Covid-19. The pandemic continues to affect the global economyand Carouselis not immune to the impact. The directors managed the impact on the business during the earlypart of 2020 with a combination of cost cutting, revenue surcharges and taking advantage of governmentschemes. This meant a maintenance of margin and reduced overheadsto give satisfactory trading performancein the months primarily affected. Should there be a second spike then the sametactics will be employed.
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CAROUSEL LOGISTICS LIMITED
STRATEGIC REPORT(CONTINUED)FOR THE YEAR ENDED 31 DECEMBER2019
Outlook
The synergies delivered from the BDA acquisition and the continued increase in new business has meantthatthe directors are confident of the continued successful growth of the Carousel Group into 2020 and beyond.The Gatewaytechnology platform along with the focus of delivering premium levels of customersatisfaction are
central to that future growth in both new and existing geographic markets. Brexit will provide a perfect opportunityfor Carouselto utilise its flexible and technology driven pan-European road andair network to overcome anychallenges that might arise to the supply chains of the company’s high performanceclients.
This report was approved by the board on 28 August 2020 and signed onits behalf.
N J WardDirector
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CAROUSEL LOGISTICS LIMITED
DIRECTORS’ REPORTFOR THE YEAR ENDED 31 DECEMBER2019
The directors presenttheir report and the financial statements for the year ended 31 December2019.
Results and dividends
Theprofit for the year, after taxation, amounted to £1,100,891 (2018 - £1,581,981).
During the year dividends of £1,000,000 (2078: £2,500,000) were distributed. The directors have not
recommended any further amountto be paid by wayof dividend.
Directors
The directors who served during the year were:
G A Martin
M P MartinM Griffiths (resigned 27 March 2020)
E K Weir (resigned 27 March 2020)
N J Ward was appointed on 27 March 2020.
Directors’ responsibilities statement
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial
statements in accordancewith applicable law and regulations.
Companylaw requires the directors to prepare financial statements for each financial year. Under that law thedirectors have elected to prepare the financial statements in accordance with United Kingdom GenerallyAccepted Accounting Practice (United Kingdom Accounting Standards and applicable taw, including FRS 102‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’). Under company law the
directors must not approvethe financial statements unless they are satisfied that they give a true andfair view ofthe state of affairs and profit or loss of the companyfor that period. In preparing these financial statements, thedirectors 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 beenfollowed, subject to any material departures
disclosed and explained in the financial statements;
. prepare the financia! 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. Theyare also responsible for safeguarding the assets of the company and hencefor taking reasonable steps for the
prevention and detection of fraud and otherirregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial informationincluded on the company's website. Legislation in the United Kingdom governing the preparation anddissemination of financial statements maydiffer from legislation in other jurisdictions.
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CAROUSEL LOGISTICS LIMITED
DIRECTORS’ REPORT (CONTINUED)FOR THE YEAR ENDED31 DECEMBER2019
Going concern
The directors have assessed the current financial position of the company, along with future cash flowrequirements to determineif the company hasthe financial resources to continue as a going concernfor a periodof at least twelve months from the approval of the accounts. As part of this assessment the directors haveconsidered the Company's compliance with debt covenants throughout the forecast period. The cash flow and
covenant forecasts considered by the directors have been prepared to take into account the expected impact ofthe Covid-19 pandemic (discussion of the impact on the companyis discussed within the Strategic Report andalso as part of the discussion below and within the notes to the financial statements in respect of post balance
sheet events).
Based on the above, the directors have concluded that it is appropriate to adopt the going concern basis in
preparing the financial statements.
Post balance sheet events
The Covid-19 pandemic has affected the global economyand the uncertainty that this created has unsurprisingly
impacted the company.
Revenues were notably down following UK lockdown in March 2020 and the business responded with scenariomodelling to ensure mitigating actions were in place to protect the financial integrity and maintain liquidity. Bymid-summer 2020 revenues returned to near normal jevels and trading profitability has been in line with or
exceeded forecasts.
The actions taken encompassed a combination of cost cutting, revenue surcharges and taking advantage ofgovernment schemes. This meant satisfactory margins were maintained, which along with reduced overheadsgave profitable trading performance in the months primarily affected. Cash balances remained strongthroughout the period with additional funding available through the Group’sfacility with HSBC bank.
Other than the effects of Covid-19, as described above, there were no events after the reporting period to
disclose.
Disclosureof information to auditor
Thedirectors confirm that:
. so far as each director is aware, there is no relevant audit information of which the company's auditor is
unaware, and
. the directors have taken all the steps that they ought to have taken as directors in order to make
themselves aware of any relevant audit information and to establish that the company's auditor is aware of
that information.
Auditor
The auditor, Grant Thornton UK LLP, will be proposed for reappointment in accordance with section 485 of theCompanies Act 2006.
This report was approved by the board on 28 August 2020 and signed on its behalf.
N J WardDirector
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Q GrantThornton
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CAROUSEL LOGISTICS LIMITED
Opinion
We have audited the financial statements of Carousel Logistics Limited (the 'company') for the year ended 31December 2019, which comprise the Statement of Income and Retained Earnings, the Statement of FinancialPosition and notes to the financial statements, including a summary of significant accounting policies. Thefinancial reporting framework that has been applied in their preparation is applicable law and United KingdomAccounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicablein the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
. give a true and fair view of the state of the company's affairs as at 31 December 2019 andofits 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.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicablelaw. Our responsibilities under those standards are further described in the 'Auditor's responsibilities for the auditof the financial statements' section of our report. We are independent of the company in accordance with theethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC'sEthical Standard, and wehavefulfilled our other ethical responsibilities in accordance with these requirements.Webelieve that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion
The impact of macro-economic uncertainties on our audit
Our audit of the financial statements requires us to obtain an understanding of all relevant uncertainties,including those arising as a consequenceofthe effects of macro-economic uncertainties such as Covid-19 andBrexit. All audits assess and challenge the reasonableness of estimates madeby the directors and the relateddisclosures and the appropriateness of the going concern basis of preparation of the financial statements.All ofthese depend on assessments of the future economic environment and the company’s future prospects andperformance.
Covid-19 and Brexit are amongst the mostsignificant economic events currently faced by the UK, and at thedate of this report their effects are subject to unprecedented levels of uncertainty, with the full range of possibleoutcomes and their impacts unknown. We applied a standardised firm-wide approach in response to theseuncertainties when assessing the company’s future prospects and performance. However, no audit should be
expected to predict the unknowable factors or all possible future implications for a company associated withthese particular events.
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Q GrantThornton
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CAROUSEL LOGISTICS LIMITED(CONTINUED)
Conclusionsrelating to going concern
Wehavenothing to report in respect of the following matters in relation to which the ISAs (UK) require us to
report to you where:
. the directors’ use of the going concern basis of accounting in the preparation of the financial statements is
not appropriate; or
. the directors have not disclosed in the financial statements any identified material uncertainties that may
cast significant doubt about the company's ability to continue to adopt the going concern basis of
accounting for a period of at least twelve months from the date when the financial statements areauthorised for issue.
In our evaluation of the directors’ conclusions, we considered the risks associated with the company's businessmodel, including effects arising from macro-economic uncertainties such as Covid-19 and Brexit, and analysedhow those risks might affect the company’s financial resourcesor ability to continue operations over the period of
at least twelve months from the date when the financial statements are authorised for issue. In accordance withthe above, we have nothing to report in these respects.
However, as we cannotpredictall future events or conditions and as subsequent events mayresult in outcomesthat are inconsistent with judgements that were reasonabie at the time they were made, the absence ofreference to a material uncertainty in this auditor's report is not a guarantee that the companywill continue inoperation.
Otherinformation
The directors are responsible for the other information. The other information comprisesthe information includedin the Annual Report, other than the financial statements and our Auditor's Report thereon. Our opinion on thefinancial statements does not cover the other information and, except to the extent otherwise explicitly stated inour report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, indoing so, consider whether the other information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such materialinconsistencies or apparent material misstatements, we are required to determine whetherthere is a materialmisstatement in the financial statements or a material misstatement of the other information. 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.
Wehavenothing to report in this regard.
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Q GrantThornton
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERSOF CAROUSELLOGISTICS LIMITED(CONTINUED)
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertakenin the course of the 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.
Matter on which we are required to report under the Companies Act 2006
In the light of the knowledge and understanding of the company and its environment obtained in the course ofthe audit, we have not identified material misstatementsin the Strategic Report or the Directors' Report.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006requires 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 directors’ remuneration specified by law are not made; or
. we havenot received all the information and explanations we require for our audit.
Responsibilities of directors for the financial statements
As explained more fully in the Directors’ Responsibilities Statement set out on page 5, the directors areresponsible for the preparation of the financial statements and for being satisfied that they give a true andfairview, and for such internal control as the directors determine is necessary to enable the preparation of financialstatements that are free from material misstatement, whether dueto fraud orerror.
In preparing the financial statements, the directors are responsible for assessing the company'sability tocontinue as a going concern, disclosing, as applicable, matters related to going concern and using the goingconcern basis of accounting unless the directors eitherintend to liquidate the companyor to cease operations, orhave norealistic alternative but to do so.
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Q GrantThornton
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CAROUSEL LOGISTICS LIMITED(CONTINUED)
Auditor's responsibilities for the audit of the financial statements
Ourobjectives are to obtain reasonable assurance about whether the financial statements as a whole are freefrom material misstatement, whether due to fraud or error, and to issue an Auditor's Report that includes ouropinion. 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 arisefrom fraud or error and are considered material if, individually or in the aggregate, they could reasonably beexpected 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 FinancialReporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our
Auditor's Report.
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of theCompanies Act 2006. Our audit work has been undertaken so that we might state to the company's membersthose matters we are required to state to them in an Auditor's Report and for no other purpose. To thefullestextent permitted by law, we do not accept or assume responsibility to anyone other than the company and thecompany's membersas a body,for our audit work, for this report, or for the opinions we have formed.
Cant ToenTou Uk Lip,
Jonathan Oakey FCASenior Statutory Auditorfor and on behalf of Grant Thornton UK LLPStatutory Auditor, Chartered AccountantsCrawley
28 August 2020
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CAROUSEL LOGISTICS LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGSFOR THE YEAR ENDED 31 DECEMBER2019
2019 2018Note £ £
Turnover 4 28,192,185 26,114,401
Cost of sales (19,733,177) (18,398,152)
Grossprofit 8,459,008 7,716,249
Administrative expenses (6,645,346) (6,088,777)
Operating profit 5 1,813,662 1,627,472
Interest receivable and similar income 9 8,420 7,016
Interest payable and expenses 10 (651,638) (1,356)
Profit before tax 1,170,444 1,633,132
Tax on profit 11 (69,553) (51,151)
Profit after tax 1,100,891 1,581,981
Retained earnings at the beginning of the year 4,999,684 5,917,703
Profit for the year 1,100,891 1,581,981
Dividends declared and paid (1,000,000) (2,500,000)
Retained earnings at the end of the year 5,100,575 4,999,684
There were no recognised gains or losses for 2019 or 2018 other than those included in the statement ofincome andretained earnings.
The notes on pages 13 to 32 form part of these financial statements.
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CAROUSEL LOGISTICS LIMITEDREGISTERED NUMBER:01908712
STATEMENTOF FINANCIAL POSITIONAS AT 31 DECEMBER2019
Fixed assets
Intangible assets
Tangible assets
Investments
Current assets
Debtors: amounts falling due within one year
Cash at bank and in hand
Creditors: amountsfalling due within oneyear
Net current assets
Total assets less currentliabilities
Creditors: amountsfalling due after morethan one year
Provisionsforliabilities
Deferred tax
Net assets
Capital and reserves
Called up share capital
Share premium account
Capital redemption reserve
Other reserves
Profit and loss account
Note
12
13
14
15
16
17
18
21
22
23
23
23
23
2019
701,832
564,738
9,143,250
10,409,820
13,564,530
576,715
14,141,245
(4,298,019)
9,843,226
20,253,046
(14,720,370)
(163,804)
(163,804)
5,368,872
10,926263,031
3,340(9,000)
5,100,575
5,368,872
2018
67,631
698,460
766,091
5,114,312
2,296,189
7,410,501
(2,847,856)
4,562,645
5,328,736
(60,755)
(60,755)
5,267,981
10,926263,031
3,340(9,000)
4,999,684
5,267,981
Thefinancial statements were approved and authorised for issue by the board and were signed onits behalf on28 August 2020.
N J WardDirector
The notes on pages 13 to 32 form part of these financial statements.
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CAROUSEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER2019
1. Generalinformation
Carousel Logistics Limited is a private companylimited by shares and incorporated in England and Wales.Its registered address is 23 Kings Hill Avenue, West Malling, Kent, ME19 4UA.
2. Accounting policies
2.1
2.2
2.3
Basis of preparation of financial statements
Thefinancial statements have been prepared underthe historical cost convention and in accordancewith Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UnitedKingdom and the Republic of Ireland and the Companies Act 2006.
Carousel Logistics Limited is a companylimited by shares andis registered in England and Wales.
The presentation currency adopted in preparing these financial statementis Sterling (£).
Financial reporting standard 102 - reduced disclosure exemptions
The company has taken advantage of the following disclosure exemptions in preparing thesefinancial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable inthe UK and Republic ofIreland”:
. the requirements of Section 7 Statement of Cash Flows;
. the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
. the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Carousel Logistics Holdings
Limited as at 31 December 2019 and these financial statements may be obtained from Companies
House, Crown Way,Cardiff CF 14 3UZ.
Going concern
The directors have assessed the current financial position of the company, along with future cashflow requirements to determine if the company has the financial resources to continue as a goingconcern for a period of at least twelve months from the approval of the accounts. As part of thisassessment the directors have considered the Company's compliance with debt covenantsthroughout the forecast period. The cash flow and covenant forecasts considered by the directors
have been prepared to take into account the expected impact of the Covid-19 pandemic (discussionof the impact on the company is discussed within the Strategic Report and also as part of thediscussion below and within the notes to the financial statements in respect of post balance sheetevents).
Based on the above, the directors have concluded that it is appropriate to adopt the going concernbasis in preparing the financial statements.
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CAROUSELLOGISTICS LIMITED
NOTESTO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED31 DECEMBER2019
2. Accounting policies (continued)
2.4
2.5
Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to thecompany and the revenue can be reliably measured. Revenue is measured as the fair value of theconsideration received or receivable, excluding discounts, rebates, value added tax and other sales
taxes. The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services areprovided in accordance with the stage of completion of the contract when all of the followingconditions are satisfied:
. the amount of revenue can be measuredreliably;
. itis probable that the company will receive the consideration due underthe contract;
. the stage of completion of the contract at the end of the reporting period can be measured
reliably; and
. the costs incurred and the costs to complete the contract can be measured reliably.
Intangible assets
Software
Software is accounted for under the cost model and is stated at historical cost less accumulatedamortisation and any accumulated impairment losses. Historical cost includes expenditure that is
directly attributable to bringing the asset into the condition necessary for it to be capable of operatingin the mannerintended by management.
Amortisation is charged from the date that the software asset becomesavailable for use and so as toallocate the cost of assets less their residual value over their estimated useful lives, using the
straight-line method.
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination andthe acquirer’s interest in the fair value of its identifiable assets andliabilities of the acquiree at thedate of acquisition. Subsequent toinitial recognition, Goodwill is measured at cost less accumulatedamortisation and accumulated impairment losses. Goodwill is amortised on a straightline basis to theStatement of Income and Retained Earnings over its useful economic life of between five to tenyears.
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CAROUSEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED31 DECEMBER2019
2. Accounting policies (continued)
2.6
2.7
2.8
2.9
Tangible fixed assets
Tangible fixed assets under the cost model are stated at historical cost less accumulateddepreciation and any accumulated impairment losses. Historical cost includes expenditure that isdirectly attributable to bringing the asset to the location and condition necessary forit to be capable ofoperating in the mannerintended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their
estimated usefullives, using the straight-line method.
Depreciation is provided on the following basis:
Leasehold Property -Plant & machinery -Motor vehicles -
Fixtures & fittings -
Computer equipment -
10%on a straight line basis20% on a straightline basisona straightline basis over 26 monthsat varying rates between 15% - 50% straight
line
33% on a straightline basis
The assets' residual values, useful lives and depreciation methods are reviewed, and adjustedprospectively if appropriate, or if there is an indication of a significant change since the last reporting
date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amountand are recognisedin the Statement of Income and Retained Earnings.
Valuation of investments
Investments in subsidiaries are measured at cost less accumulated impairment.
Debtors
Short term debtors are measured at transaction price, less any impairment. Loans receivable aremeasuredinitially at fair value, net of transaction costs, and are measured subsequently at amortisedcost using the effective interest method, less any impairment.
Cash and cash equivalents
Cashis represented by cash in hand and deposits with financial institutions repayable without penaltyon notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in nomore than three months from the date of acquisition and that are readily convertible to knownamounts of cash with insignificant risk of change in value.
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CAROUSEL LOGISTICS LIMITED
NOTESTO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER2019
2. Accounting policies (continued)
2.10 Financial instruments
The companyonly enters into basic financial instruments transactions that result in the recognition offinancial assets andliabilities like trade and other accounts receivable and payable, loans from banksand otherthird parties, loans to related parties and investments in non-puttable ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loansand other accounts receivable and payable,areinitially measured at present value of the future cashflows and subsequently at amortised cost using the effective interest method. Debt instruments thatare payable or receivable within one year, typically trade payables or receivables, are measured,initially and subsequently, at the undiscounted amountof the cash or other consideration, expected tobe paid or received. Howeverif the arrangements of a short-term instrument constitute a financingtransaction, like the paymentof a trade debt deferred beyond normal business termsorfinanced at arate of interest that is not a market rate or in case of an out-right short-term loan not at marketrate,the financial asset orliability is measured, initially, at the present value of the future cash flowdiscounted at a marketrate of interest for a similar debt instrument and subsequently at amortised
cost.
Financial assets that are measured at cost and amortised cost are assessed at the end of eachreporting period for objective evidence of impairment. If objective evidence of impairmentis found, animpairment loss is recognised in the Statement of Income and Retained Earnings.
Forfinancial assets measured at amortised cost, the impairment loss is measured asthe differencebetweenan asset's carrying amount and the present value of estimated cash flows discounted at theasset's original effective interest rate. If a financial asset has a variable interest rate, the discount ratefor measuring any impairment loss is the current effective interest rate determined under thecontract.
For financial assets measured at cost less impairment, the impairment loss is measured as thedifference between an asset's carrying amount and best estimate, which is an approximation of theamount that the Company would receive for the assetif it were to be sold at the balance sheet date.
Financial assets andliabilities are offset and the net amount reported in the Balance Sheet whenthere is an enforceable right to set off the recognised amounts andthereis an intention to settle on anet basis orto realise the asset and settle the liability simultaneously.
2.11 Creditors
Short term creditors are measured at the transaction price. Otherfinancialliabilities, including bankloans, are measuredinitially at fair value, net of transaction costs, and are measured subsequently atamortised cost using the effective interest method.
2.12 Finance costs
Finance costs are charged to the Statement of Income and Retained Earnings over the term of thedebt using the effective interest method so that the amount charged is at a constant rate on thecarrying amount. Issue costs areinitially recognised as a reduction in the proceeds of the associatedcapital instrument.
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CAROUSEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2019
Accounting policies (continued)
2.13 Dividends
Equity dividends are recognised when they become legally payable. Interim equity dividends arerecognised when paid. Final equity dividends are recognised when approved by the shareholders atan annual general meeting. Dividends on shares recognised as liabilities are recognised as expensesand classified within interest payable.
2.14 Operating leases: the company as lessee
Rentals paid under operating leases are charged to profit or loss on a straight line basis over theperiod of the lease.
2.15 Pensions
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 the Statement of Income and Retained Earnings
when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of FinancialPosition. The assets of the plan are held separately from the company in independently administered
funds.
2.16 Interest income
Interest income is recognised in the Statement of Income and Retained Earnings using the effective
interest method.
2.17 Borrowing costs
All borrowing costs are recognised in the Statement of Income and Retained Earnings in the year inwhich they are incurred.
2.18 Provisionsforliabilities
Provisions are made where an event has taken place that gives the company a legal or constructive
obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate
can be madeof the amountof the obligation.
Provisions are charged as an expenseto the Statement of Income and Retained Earningsin the yearthat the company becomes aware of the obligation, and are measured at the best estimate at theStatement of Financial Position date of the expenditure required to settle the obligation, taking intoaccountrelevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement ofFinancial Position.
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CAROUSELLOGISTICS LIMITED
NOTESTO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED31 DECEMBER2019
2. Accounting policies (continued)
2.19 Current and deferred taxation
The tax expensefor the year comprises current and deferred tax. Tax is recognised in the Statementof Income and Retained Earnings, except that a charge attributable to an item of income andexpense recognised as other comprehensive income or to an item recognised directly in equity isalso recognised in other comprehensive incomeordirectly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have beenenacted or substantively enacted by the reporting date in the countries where the companyoperates
and generates income.
Deferred tax balances are recognised in respectof all timing differences that have originated but notreversed by the Statementof Financial Position date, except that:
. The recognition of deferred tax assetsis limited to the extentthatit is probable that they will be
recovered against the reversal of deferred tax liabilities or other future taxable profits; and
. Anydeferred tax balances are reversed if and when ali conditions for retaining associated tax
allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect ofbusiness combinations, when deferred tax is recognised on the differences betweenthe fair values ofassets acquired and the future tax deductions available for them and the differences betweenthe fair
values of liabilities acquired and the amountthat will be assessed for tax. Deferred tax is determinedusing tax rates and laws that have been enacted or substantively enacted by the reporting date.
Judgements in applying accounting policies and key sources of estimation uncertainty
In the opinion of the directors there is not a significant level of judgement and estimation uncertaintyinvolved in the preparation of the financial statements. The Company's underlying operations aretransactional by nature do not require a significant level of judgement or estimation in orderto reflect the
performanceorfinancial position of the company.
There are relatively minor judgements applied in the valuation of accrued and prepaid expenses where theamounts included in the financial statements are accounted for on a time-proportioned basis, and
instances where the directors have needed to apply a minor degree of judgementin estimating amountsultimately payable to suppliers and professional service providers. Howeverthese instancesare infrequentand are not considered to be material by the directors.
The directors have used their judgement in estimating the useful lives of tangible fixed assets and indetermining the appropriate accounting policy for recognising depreciation in the Statement of Income andretained Earnings. The directors are not aware of any factors or circumstances that cast doubt on thevalidity of the estimated useful lives or the appropriateness of the depreciation policies applied.
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CAROUSEL LOGISTICS LIMITED
NOTESTO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2019
4. Turnover
All turnover arose within the United Kingdom andis attributable to the rendering of services.
5. Operating profit
The operating profit is stated after charging/(crediting):
! 2019 2018£ £
Depreciation of tangible fixed assets 305,917 214,770
Amartisation of intangible assets, including goodwill 26,180 26,180
: Operating lease rentals 662,375 682,880
| (Profit)/loss on sale of tangible assets 33,417 8,198
6. Auditor's remuneration
| 2019 2018| £ £
Fees payable to the company's auditor andits associates for the audit ofthe company's annualfinancial statements 33,500 24,750
Taxation compliance services 13,450 8,750
Statutory accounts preparation 2,000 1,500
DocuSign Envelope ID: 7058DA87-52FA-4830-869F-5E9E99C74510
CAROUSEL LOGISTICS LIMITED
NOTESTO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2019
7. Employees
Staff costs, including directors' remuneration, were asfollows:
2019 2018£ £
Wagesandsalaries 3,195,064 3,210,445
Social security costs 311,157 335,804
Cost of defined contribution scheme 89,367 71,189
3,595,588 3,617,438
The average monthly number of employees,including the directors, during the year was asfollows:
2019 2018No. No.
Management 12 8
Accounts/IT 25 17
Sales/customer services 47 32
Warehouse/drivers 53 36
137 93
8. Directors' remuneration
2019 2018£ £
Directors’ emoluments 680,694 531,615
Company contributions to defined contribution pension schemes 9,763 7,771
690,457 539,386
During the year retirement benefits were accruing to two Directors (2078: two) in respect of definedcontribution schemes.
The highest paid director received remuneration of £249,000 (2018: £160,456).
The value of the company's contributions paid to a defined contribution pension schemein respect of thehighest paid director amounted to £Nil (2018: £Nil).
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CAROUSEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER2019
9. Interest receivable
Bankinterest receivable
10. Interest payable and similar expenses
Bankinterest payable
11. Taxation
Corporation tax
Current tax on profits for the year
Adjustments in respect of previous periods
2019
8,420
2019£
651,638
2019
(33,496)
(33,496)
Total current tax
Deferred tax
Origination and reversal of timing differences
Total deferred tax
Taxation on profit on ordinary activities
(33,496)
103,049
103,049
69,553
2018
7,016
2018
1,356
2018
46,175
(29)
46,146
46,146
5,005
5,005
51,151
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CAROUSEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER2019
11. Taxation (continued)
Factors affecting tax charge for the year
The tax assessedfor the year is lower than (2018 - lower than) the standard rate of corporation tax in the
UK of 19% (2018 - 19%). The differences are explained below:
2019£
Profit on ordinary activities before tax 1,170,444
Profit on ordinary activities multiplied by standard rate of corporation tax inthe UK of 19% (2018 - 19%) 222,384
Effects of:
Non-tax deductible amortisation of goodwill and impairment 7,548
Fixed asset differences 9,610
Adjustments to brought forward values (9,858)
Adjustments to tax charge in respect of prior periods (33,496)
Grouprelief (126,635)
Total tax charge for the year 69,553
2018£
1,633,132
310,295
11,7175,790(589)
(29)(276,033)
51,151
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CAROUSEL LOGISTICS LIMITED
NOTESTO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER2019
12. Intangible assets
Software(Gateway) Goodwill Total
£ £ £
Cost
At 1 January 2019 - 130,900 130,900
Additions 660,381 - 660,381
At 31 December 2019 660,381 130,900 791,281
Amortisation
At 1 January 2019 - 63,269 63,269
Chargefor the year - 26,180 26,180
At 31 December 2019 - 89,449 89,449
Net bookvalue
At 31 December 2019 660,381 41,451 701,832
At 31 December 2018 - 67,631 67,631
During the year the company incurred costs of £660,381 in connection with the development of theGateway system. No amortisation has been charged during the year as the system was not available foruse at the balance sheet date.
Amortisation on intangible assets is charged to administrative expenses.
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CAROUSELLOGISTICS LIMITED
NOTESTO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED31 DECEMBER2019
13. Tangible fixed assets
Cost
At 1 January 2019
Additions
Disposals
At 31 December 2019
Depreciation
At 1 January 2019
Chargefor the year on owned assets
Disposals
At 31 December 2019
Net book value
At 31 December 2019
At 31 December 2018
Leasehold Plant & Fixtures & Computerproperty machinery fittings equipment Total
£ £ £ £ £
473,485 108,756 1,133,965 618,035 2,334,241
- 11,289 135,647 58,676 205,612
- - (203,584) - (203,584)
473,485 120,045 1,066,028 676,711 2,336,269
473,485 96,235 779,838 286,223 1,635,781
- 4,871 156,821 144,225 305,917
- . (170,167) - (170,167)
473,485 101,106 766,492 430,448 1,771,531
- 18,939 299,536 246,263 564,738
- 12,521 354,127 331,812 698,460
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CAROUSEL LOGISTICS LIMITED
NOTESTO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER2019
14. Fixed asset investments
Investmentsin
subsidiarycompanies
£
Cost
Additions 9,143,250
At 31 December 2019 9,143,250
Net book value
At 31 December 2019 9,143,250
At 31 December 2018 -
On 11 March 2019 the Company acquired 100% of the issued share capital of BDA Assets andInvestments D.A.C. The purchase consideration comprised of a combination of cash (£6,859,046), loannotes issued (£400,000), the assumption of potential tax liabilities (£425,248), deferred contingent
consideration (£139,335) and directly attributable transaction costs (£1,319,622).
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CAROUSEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED31 DECEMBER 2019
14. Fixed asset investments (continued)
Subsidiary undertakings
The following were subsidiary undertakings of the company:
Class ofName Registered office shares
BDA Assets and Suite 3, One Earlsfort Centre, Lower Hatch Street, Dublin 2 OrdinaryInvestments DAC sharesBespoke Distribution Suite 3, One Earlsfort Centre, Lower Hatch Street, Dublin 2 OrdinaryAviation Limited sharesBDA Transport Limited Suite 3, One Earlsfort Centre, Lower Hatch Street, Dublin 2 Ordinary
sharesBDA NightExpress Limited Unit 2 The Gateway, Terminal Road, Air Cargo Centre, Ordinary
Birmingham Airport, B26 3QD sharesBDA NL B.V Horsterweg 21, 6199 AC Maastricht Airport Ordinary
sharesNightExpress TOR 109, Gebaeude 511, Flughafen Frankfurt, D-60549 Ordinary
Luftverkehrsgesellschaft Frankfurt am Main shares
Holding
100%
100%
100%
100%
100%
100%
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CAROUSEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER2019
15.
16.
17.
Debtors
2019£
Trade debtors 3,483,477
Amounts owed by group undertakings 8,553,079
Other debtors 1,011,405
Prepayments and accrued income 363,436
Tax recoverable 153,133
13,564,530
2018£
2,641,765
1,144,832
842,307
355,826
129,582
5,114,312
All amounts owed to/by group undertakings are repayable on demandat the discretion of the lender.
Cash and cash equivalents
2019£
Cash at bank and in hand 576,715
Creditors: Amountsfalling due within one year
2019£
Bank loans 202,064
Trade creditors 3,041,231
Other taxation and social security 185,604
Other creditors 564,583
Accruals and deferred income 304,537
4,298,019
2018£
2,296,189
2018
1,938,707
403,124
506,025
2,847,856
HSBC BankPic hold fixed and floating charges overall the assets and undertakings of the companyinconnection with guarantees issued in respect of the secured borrowings of the company's the parentundertaking, Carousel Logistics Holdings Limited.
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‘DocuSign Envelope ID: 7058DA87-52FA-4830-869F-5E9E99C74510
CAROUSEL LOGISTICS LIMITED
NOTESTO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2019
18. Creditors: Amounts falling due after more than one year
2019 2018£ £
Bank loans 14,320,370 -
Loan notes 400,000 -
14,720,370 -
Loan notes are accounted for as basic financial instruments in accordance with FRS 102 section 11 andare carried at amortised cost using the effective interest rate method. The interest rates applying to theloan notes are fixed at 10%, which is the effective interest rate. Finance costs are therefore recognisedinthe income statement based on the constant effective rate. Contractual repayments of principal andinterest are treated as cash flows and reduce the carrying amountof the loan notes.
Bankloansare similarly accounted for as basic financial instruments in accordance with FRS 102 section11 and are carried at amortised cost using the effective interest rate method. The interest rates applyingto bank loans are variable, and reflect a market rate. Finance costs are therefore recognised in theincome statement based on these variable rates, which equate to the effective interest rate and whichduring the year ranged between 2.5% and 4%. Contractual repayments of principal and interest aretreated as cash flows and reduce the carrying amount of the bank loans.
HSBC BankPlc hold fixed and floating charges overall the assets and undertaking of Carousel Logistics
Limited.
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CAROUSEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER2019
19. Loans
Analysis of the maturity of loans is given below:
2019 2018£ £
Amounts falling due within one year
Bank loans 202,064 -
202,064 -
Amounts falling due 1-2 years
Bank ioans 355,370 -
355,370 -
Amounts falling due 2-5 years
Bank loans 1,530,000 -
Loan notes 400,000 -
1,930,000 -
Amounts falling due after more than 5 years
Bank loans 12,435,000 -
12,435,000 -
14,922,434 -
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+ ,Docu$ign Envelope ID: 7058DA87-52FA-4830-869F-5E9E99C74510
CAROUSELLOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER2019
20.
21.
Financial instruments
2019£
Financial assets
Financial assets that are debt instruments measured at amortised cost 13,047,961
Financialliabilities
Financial liabilities measured at amortised cost (18,832,785)
2018
4,628,904
(2,444,732)
Financial assets that are debt instruments measured at amortised cost comprise trade debtors, amountsdue from group undertakings and accrued income.
Financial liabilities measured at amortised cost comprise trade creditors, accruals, bank loans, loannotes and other creditors.
Deferred taxation
2019£
At beginning of year (60,755)
Charged to the profit or loss (103,049)
At end of year (163,804)
The provision for deferred taxation is made up as follows:
2019£
Accelerated capital allowances (165,549)
Short term timing differences 1,745
(163,804)
2018
(55,750)(5,005)
(60,755)
2018£
(61,819)1,064
(60,755)
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CAROUSEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER2019
22.
23.
24.
Share capital
2019 2018£ £
Allotted, called up and fully paid
10,926 (2018 - 10,926) Ordinary Shares shares of £1 each 10,926 10,926
There is a single class of ordinary shares. There are no restrictions on dividends and the repayment ofcapital
Reserves
Thefollowing note describes the nature and purpose of each reserve:
Called up sharecapitalAmount described for share capital. There has been no changein called up share capital during the year.
Share premium
Amount subscribed for share capital in ecess of nominal amount. There has been no changein the SharePremium reserve balanceduring the year.
Capital redemption reserveArises in relation to redemption or purchase and cancellation of the company's own shares. For purposesof a capital reduction under Companies Act 2006, this reserve is treated as part of Capital. There has
been no change in the Capital Redemption reserve balance during the year.
Other reserves
There has been no change in the other reserves balance during the year.
Profit and loss accountComprises the accumulated profits and losses recognised in the profit and loss account. The balance on
this reserve is the starting point for determining the amount of profits available for distribution.
Commitments underoperating leases
At 31 December 2019 the company had future minimum lease payments under non-cancellableoperating leases as follows:
2019 2018£ £
Notlater than 1 year 665,488 623,836
Later than 1 year and notlater than 5 years 1,267,895 1,077,930
Later than 5 years 324,568 162,840
2,257,951 1,864,606
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CAROUSELLOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER2019
25.
26.
27.
Related party transactions
The company rents property from Carousel Business Consultants Limited Retirements Benefit Schemefor which rent of £180,000 was paid during the year (2078: £780,000).
The Company has taken advantage of the exemption available under FRS 102 section 33 from therequirement to disclose related party transactions entered into between two or more members of thesame group whereall subsidiaries are wholly owned.
Post balance sheet events
The Covid-19 Pandemic has affected the global economy and the uncertainty that this created hasunsurprisingly impacted the company.
Revenues were notably down following UK lockdown in March 2020 and the business responded withscenario modelling to ensure mitigating actions were in place to protect the financial integrity and maintainliquidity. By mid-summer 2020 revenues returned to near normallevels and trading profitability has been
in line with or exceededforecasts.
The actions taken encompassed a combination of cost cutting, revenue surcharges and taking advantageof government schemes. This meant satisfactory margins were maintained, which along with reducedoverheads gaveprofitable trading performance in the monthsprimarily affected. Cash balances remainedstrong throughoutthe period with additional funding available through the Group’sfacility with HSBC bank.
Other than the effects of Covid-19, as described above, there were no events after the reporting period to
disclose.
Ultimate parent undertaking and controlling party
The smallest and largest group for which consolidated accounts are prepared and in which the company’sresults are included is Carousel Logistics Holdings Limited, a private companylimited by shares andincorporated in England and Wales. Carousel Logistics Holdings Limited owns 100% of the issued sharecapital of the company.
As at 31 December2019,in the view of the directors the company had no ultimate controlling party.
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