Company Registration No. 02406650 (England and Wales)
CARGO SECURE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2022
LB GROUP
The Octagon Suite E2
2nd Floor Middleborough
Colchester
Essex
CO1 1TG
CARGO SECURE LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 7
Income statement
8
Statement of financial position
10
Statement of changes in equity
11
Notes to the financial statements
12 - 23
CARGO SECURE LIMITED
COMPANY INFORMATION
Directors
Mr S Hewitt
Mr B Grunnell
Mr T Hewitt
Mr C Hewitt
(Appointed 12 October 2022)
Company number
02406650
Registered office
80 Compair Crescent
Ipswich
Suffolk
UK
IP2 0EH
Auditor
LB Group (Colchester)
The Octagon Suite E2
2nd Floor Middleborough
Colchester
Essex
CO1 1TG
CARGO SECURE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2022
- 1 -
The directors present the strategic report for the year ended 31 July 2022.
Fair review of the business
The directors are pleased with the financial results reported. Turnover increased in the year from £8.4m to £10.6m due to an increase in volume and activity. The Gross Profit margin achieved is broadly in line with that achieved in 2021 and given the significant rise in sales, is a particularly pleasing result.
Principal risks and uncertainties
The current UK economy and ongoing issues post the COVID pandemic and Brexit continue to be the biggest risks facing the company, however the directors are of the opinion that the company is well placed to deal with such risks based on the financial strength of the company.
Development and performance
The company's directors continually monitor the performance of the company and strive to ensure that the company continues to develop to meet the needs of their customers and of any changes in the company's industry and market.
Key performance indicators
The directors consider that due to the straight-forward nature of the business, the results reported in these financial statements provide all the key information needed.
Mr T Hewitt
Director
28 April 2023
CARGO SECURE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JULY 2022
- 2 -
The directors present their annual report and financial statements for the year ended 31 July 2022.
Principal activities
The principal activity of the company during the year continued to be that of cargo loading and securing.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £2,056,000. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr S Hewitt
Mr B Grunnell
Mr T Hewitt
Mr C Hewitt
(Appointed 12 October 2022)
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr T Hewitt
Director
28 April 2023
CARGO SECURE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JULY 2022
- 3 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
CARGO SECURE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CARGO SECURE LIMITED
- 4 -
Opinion
We have audited the financial statements of Cargo Secure Limited (the 'company') for the year ended 31 July 2022 which comprise the income statement, the statement of comprehensive income, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 July 2022 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.
CARGO SECURE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CARGO SECURE LIMITED
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report 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.
CARGO SECURE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CARGO SECURE LIMITED
- 6 -
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.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
• The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
• We identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the cargo loading sector;
• We focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, data protection, anti-bribery, employment, environmental and health and safety legislation;
• We assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
• Identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
• Making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
• Considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
• Performed analytical procedures to identify any unusual or unexpected relationships;
• Tested journal entries to identify unusual transactions;
• Reviewed the internal controls in place, specifically around payroll and bank transactions; and
• Assessed whether judgements and assumptions made in determining the accounting estimates around depreciation were indicative of potential bias.
• Investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
• Agreeing financial statement disclosures to underlying supporting documentation;
• Enquiring of management as to actual and potential litigation and claims; and
• Reviewing correspondence with HMRC and the company's legal advisors.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
CARGO SECURE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CARGO SECURE 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.
Other matters which we are required to address
The financial statements of the company for the year ended 31 July 2021 were not audited.
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.
Shaun Roberts
Senior Statutory Auditor
For and on behalf of LB Group (Colchester)
28 April 2023
Chartered Accountants
Statutory Auditor
The Octagon Suite E2
2nd Floor Middleborough
Colchester
Essex
CO1 1TG
CARGO SECURE LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 JULY 2022
- 8 -
Unaudited
2022
2021
Notes
£
£
Turnover
3
10,615,370
8,418,932
Cost of sales
(6,469,326)
(5,097,602)
Gross profit
4,146,044
3,321,330
Administrative expenses
(1,793,868)
(1,336,978)
Other operating income
542,700
417,635
Operating profit
4
2,894,876
2,401,987
Interest receivable and similar income
7
12,632
199
Profit before taxation
2,907,508
2,402,186
Tax on profit
8
(471,784)
(472,701)
Profit for the financial year
2,435,724
1,929,485
The income statement has been prepared on the basis that all operations are continuing operations.
CARGO SECURE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2022
- 9 -
Unaudited
2022
2021
£
£
Profit for the year
2,435,724
1,929,485
Other comprehensive income
-
-
Total comprehensive income for the year
2,435,724
1,929,485
CARGO SECURE LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 JULY 2022
31 July 2022
- 10 -
Unaudited
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
10
879,099
781,761
Current assets
Stocks
11
56,749
49,670
Debtors
12
2,795,393
3,286,568
Cash at bank and in hand
1,568,698
1,679,077
4,420,840
5,015,315
Creditors: amounts falling due within one year
13
(2,322,167)
(3,242,940)
Net current assets
2,098,673
1,772,375
Total assets less current liabilities
2,977,772
2,554,136
Provisions for liabilities
Deferred tax liability
14
196,993
153,081
(196,993)
(153,081)
Net assets
2,780,779
2,401,055
Capital and reserves
Called up share capital
16
10,000
10,000
Profit and loss reserves
2,770,779
2,391,055
Total equity
2,780,779
2,401,055
The financial statements were approved by the board of directors and authorised for issue on 28 April 2023 and are signed on its behalf by:
Mr T Hewitt
Director
Company Registration No. 02406650
CARGO SECURE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2022
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 August 2020
10,000
2,110,320
2,120,320
Year ended 31 July 2021:
Profit and total comprehensive income for the year
-
1,929,485
1,929,485
Dividends
9
-
(1,648,750)
(1,648,750)
Balance at 31 July 2021
10,000
2,391,055
2,401,055
Year ended 31 July 2022:
Profit and total comprehensive income for the year
-
2,435,724
2,435,724
Dividends
9
-
(2,056,000)
(2,056,000)
Balance at 31 July 2022
10,000
2,770,779
2,780,779
CARGO SECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2022
- 12 -
1
Accounting policies
Company information
Cargo Secure Limited is a private company limited by shares incorporated in England and Wales. The registered office is 80 Compair Crescent, Ipswich, Suffolk, UK, IP2 0EH.
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:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Cargo Secure Holdings Limited. These consolidated financial statements are available from its registered office, 80 Compair Crescent, Ipswich, Suffolk, England, IP2 0EH.
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 and volume rebates.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
CARGO SECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2022
1
Accounting policies
(Continued)
- 13 -
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 & machinery
5% and 15% straight line
Fixtures, fittings & equipment
15% straight line
Computer equipment
15% straight line
Motor vehicles
25% straight line
Trailers
25% straight line
Work equipment
15% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
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
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
CARGO SECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2022
1
Accounting policies
(Continued)
- 14 -
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
CARGO SECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2022
1
Accounting policies
(Continued)
- 15 -
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.
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.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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.
CARGO SECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2022
1
Accounting policies
(Continued)
- 16 -
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 income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
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.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.14
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
CARGO SECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2022
- 17 -
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.
3
Turnover and other revenue
Unaudited
2022
2021
£
£
Turnover analysed by class of business
Sales of Stock
229,879
68,047
Container Work Cargo Handling
3,650,311
3,695,752
Haulage
3,602,510
2,153,172
Storage
1,876,447
1,126,267
Customs Clearance
1,256,223
1,375,694
10,615,370
8,418,932
Unaudited
2022
2021
£
£
Other revenue
Interest income
12,632
199
Grants received
111,130
4
Operating profit
Unaudited
2022
2021
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
15,000
Depreciation of owned tangible fixed assets
197,589
152,625
Operating lease charges
620,200
418,286
CARGO SECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2022
- 18 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
Unaudited
2022
2021
Number
Number
Directors
4
3
Drivers
6
6
Office
16
13
Warehouse
35
30
Total
61
52
Their aggregate remuneration comprised:
Unaudited
2022
2021
£
£
Wages and salaries
1,789,495
1,523,232
Social security costs
19,493
19,083
Pension costs
123,821
87,316
1,932,809
1,629,631
6
Directors' remuneration
Unaudited
2022
2021
£
£
Remuneration for qualifying services
98,270
92,277
Company pension contributions to defined contribution schemes
123,821
87,316
222,091
179,593
7
Interest receivable and similar income
Unaudited
2022
2021
£
£
Interest income
Interest on bank deposits
632
199
Interest receivable from connected companies
12,000
Total income
12,632
199
CARGO SECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2022
- 19 -
8
Taxation
Unaudited
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
427,872
408,985
Deferred tax
Origination and reversal of timing differences
43,912
63,716
Total tax charge
471,784
472,701
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:
Unaudited
2022
2021
£
£
Profit before taxation
2,907,508
2,402,186
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
552,427
456,415
Tax effect of expenses that are not deductible in determining taxable profit
2,336
Group relief
(98,266)
Permanent capital allowances in excess of depreciation
(28,625)
(47,430)
Deferred tax charge
43,912
63,716
Taxation charge for the year
471,784
472,701
9
Dividends
Unaudited
2022
2021
£
£
Final paid
2,056,000
1,648,750
CARGO SECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2022
- 20 -
10
Tangible fixed assets
Plant & machinery
Fixtures, fittings & equipment
Computer equipment
Motor vehicles
Trailers
Work equipment
Total
£
£
£
£
£
£
£
Cost
At 1 August 2021
1,047,801
22,484
116,890
270,240
321,006
32,694
1,811,115
Additions
143,010
463
2,551
133,500
15,403
294,927
Disposals
(157,131)
(4,266)
(31,133)
(63,024)
(107,760)
(13,939)
(377,253)
At 31 July 2022
1,033,680
18,681
88,308
340,716
213,246
34,158
1,728,789
Depreciation and impairment
At 1 August 2021
489,586
18,094
48,470
129,658
321,006
22,540
1,029,354
Depreciation charged in the year
136,740
2,269
12,937
42,576
3,067
197,589
Eliminated in respect of disposals
(157,131)
(4,266)
(31,133)
(63,024)
(107,760)
(13,939)
(377,253)
At 31 July 2022
469,195
16,097
30,274
109,210
213,246
11,668
849,690
Carrying amount
At 31 July 2022
564,485
2,584
58,034
231,506
22,490
879,099
At 31 July 2021
558,215
4,390
68,420
140,582
10,154
781,761
CARGO SECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2022
- 21 -
11
Stocks
Unaudited
2022
2021
£
£
Raw materials and consumables
56,749
49,670
12
Debtors
Unaudited
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
2,130,136
1,556,419
Other debtors
442,353
1,601,381
Prepayments and accrued income
222,904
128,768
2,795,393
3,286,568
Included within other debtors is £351,754 (2021: £554,462) owed by connected companies. These amounts are repayable upon demand.
13
Creditors: amounts falling due within one year
Unaudited
2022
2021
£
£
Trade creditors
960,499
781,493
Corporation tax
427,872
408,985
Other taxation and social security
185,975
109,993
Amounts owed to group company
462,474
1,712,435
Other creditors
41,587
95,709
Accruals and deferred income
243,760
134,325
2,322,167
3,242,940
Included within other creditors is £3,406 (2021: £NIL) owed to connected companies. These amounts are payable upon demand.
CARGO SECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2022
- 22 -
14
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Unaudited
Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
196,993
153,081
2022
Movements in the year:
£
Liability at 1 August 2021
153,081
Charge to profit or loss
43,912
Liability at 31 July 2022
196,993
15
Retirement benefit schemes
Unaudited
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
123,821
87,316
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.
16
Share capital
Unaudited
Unaudited
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
10,000
10,000
10,000
10,000
17
Related party transactions
The company is under the control of Mr S Hewitt by virtue of his majority shareholding in the parent company, Cargo Secure Holdings Limited. Mr S Hewitt was the managing director throughout the current and previous year.
At the statement of financial position date the total balance owed to the company by the Cargo Secure Limited Retirement Benefit Scheme was £8,871 (2021: £51,403).
At the statement of financial position date the company was owed £243,944 (2021: £243,944) by Aurora Bars and Restaurants Limited, a connected company by virtue of Mr S Hewitt being a common director and majority shareholder.
CARGO SECURE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2022
- 23 -
18
Ultimate controlling party
The parent company is Cargo Secure Holdings Limited.
The ultimate controlling party is Stephen Hewitt by virtue of his controlling shareholding.
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