Seko Omni-Channel Logistics Limited
Registered number: 08773821
Annual report
For the year ended 31 December 2021
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
COMPANY INFORMATION
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Chartered Accountants & Statutory Auditor
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
CONTENTS
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Independent Auditor's Report
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Statement of Comprehensive Income
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Statement of Changes in Equity
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Notes to the Financial Statements
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
The directors present their strategic report for Seko Omni-Channel Logistics Limited (the "Company") for the year ended 31 December 2021.
Principal activity
Seko Omni-Channel Logistics Limited are a leading provider of customer focused supply chain management and logistics solutions.
We aim to present a balanced and comprehensive review of the development and performance of our business during the year and its position at the year end.
We consider that our key financial performance indicators are those that communicate the financial performance and strength of the Company as a whole, these being Turnover, Gross profit, Operating profit and Profit before tax.
In 2021 the turnover increased by 17%, due to increased trade with existing clients and some new business wins. There has been a significant increase in the cost of labour, driven by impact of UK minimum wage rise increases and resultant effect throughout the payroll, an increase in demand for labour in Distribution warehouses to cope with demand from E-commerce growth (accelerated by the Covid-19 pandemic) and reduced available labour from the EU as staff decided to return to EU following Brexit. While Seko has utilised the IT systems that the Company continues to develop, and this helped to increase labour efficiency, the full cost impact has not been able to be fully transferred to customers and so reduced profits which has enabled business to increase profit before tax by £345k (18%) vs 2020.
Seko has a strong future growth plan, to support this, Seko continues to invest in our staff and further develop and support our IT systems. The expectation is that this investment will enable the labour to become even more efficient, which is key in a labour driven business, given the UK legislated increases UK minimum wage and scarcity of available staff given the UK’s current low unemployment.
The expectation for 2022 will be to continue to grow the revenue and continue to improve cost efficiency to deliver a profit before tax in excess of £2m for the full year.
May YTD results of 2022 have shown Profit before tax of 746k which is 3% higher than the same period last year.
The Company is well positioned for strong expected growth over the next 5 years.
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
Principal risks and uncertainties
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The Company’s activities expose it to a variety of financial risks – market risk (including currency risk and interest rate risk) and credit risk. The Company’s overall risk management focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s performance.
Competitive pressures and current economic climate in the market are a continuing risk to the Company, which could result in price reductions. The Company manages this risk by providing and implementing innovative new services together with greater value added services to its key clients and by maintaining strong relationships with customers.
Market risk
The Company's sales are primarily denominated in Sterling. However some accounts are billed in US Dollars and Euros and so the Company is therefore exposed to the movement in exchange rates on sales and purchases that are denominated in other currencies. This risk is assessed on an ongoing basis. The Company does not use derivative financial instruments to manage currency exposure and, as such, no hedge accounting is applied.
The Company has no external borrowings and thus interest rate risk is low.
Credit risk
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit checks are performed on all customers requiring credit. The receivable balances are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. We aim to mitigate liquidity risk by managing cash generation by our operations and applying cash collection targets
Fair value
There is no material difference between the fair value of the Company's financial assets and liabilities and their carrying value in the balance sheet.
The withdrawal of the United Kingdom from the European Union
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New trading arrangements between the United Kingdom and the European Union took effect on 31 December 2020. In general, tariffs and quotas on trade have not been introduced, although administrative complications and regulatory restrictions have reduced the freedom of cross-border trade. The Company is carefully monitoring the practical application of the new trading arrangements by regulatory authorities, to better understand what the eventual impact on its business will be. The process of determining these effects is ongoing, and has also been delayed by the suspension of certain sectors of economic activity in response to the COVID-19 pandemic.
The COVID-19 pandemic continues to affect the UK and global economies however the recent lifting of social restrictions by the government means the directors anticipate the UK and global economies to return to growth in due course. It is not possible to predict how quickly and to what degree this may happen. The priorities of the directors remain to comply with any remaining regulatory requirements to the fullest extent possible, and to maintain the safety and well-being of the Company's personnel.
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
This report was approved by the board and signed on its behalf by:
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
The directors present their report and the audited financial statements for Seko Omni-Channel Logistics Limited (the "Company") for the year ended 31 December 2021.
Seko Omni-Channel Logistics Limited are a leading provider of customer focused supply chain management and logistics solutions.
The profit for the year, after taxation, amounted to £1,214,559 (2020: profit of £1,494,291).
The directors do not recommend the payment of a dividend (2020: £nil).
The directors who served during the year and to the date of this report were:
Directors' responsibilities statement
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The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs 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 for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to 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.
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
Seko Logistics Group Limited has procured insurance to provide indemnity cover for all directors in respect of the cost of defending claims against the, and third party liabilities. These are all third party indemnity provisions for the purpose of the Companies Act 2006 and are all currently in force.
Matters covered in the Strategic Report
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As permitted by Paragraph 1A of Schedule 7 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 certain matters which are required to be disclosed in the Directors' Report have been omitted as they are included in the Strategic Report on pages 1 to 3. These matters relate to business review and principal risks and uncertainties.
The results of the Company are set out in the Statement of Comprehensive Income above. The financial position of the Company, its liquidity position and its cash flows are reflected in the Balance Sheet.
The directors have assessed the current and forecasted trading activity and expected forecasted cashflows and have concluded that there is certainty that the company is expected to be able to continue to meet its obligations as they arise for the foreseeable future. The period that the directors have paid particular attention to was a period of no less than 12 months from the date of approval.
Potential sources of uncertainty noted by the directors include the withdrawal of the United Kingdom from the European Union, and Coronavirus and the COVID-19 pandemic. The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
The Company does not foresee significant changes in trading levels or margins for the foreseeable future.
Disclosure of information to auditor
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Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware; and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
Post balance sheet events
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On 24 February 2022 Russian Forces entered Ukraine, resulting in Western Nation reactions including announcements of sanctions against Russia and Russian interests worldwide and an economic ripple effect on the global economy. The directors have carried out an assessment of the potential impact of Russian Forces entering Ukraine on the business, including the impact of mitigation measures and uncertainties, and have concluded that this is a non-adjusting post balance sheet event.
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
The auditor, Mazars LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf by:
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SEKO OMNI-CHANNEL LOGISTICS LIMITED
Opinion
We have audited the financial statements of Seko Omni-Channel Logistics Limited (the ‘Company’) for the year ended 31 December 2021 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 December 2021 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.
Basis for opinion
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.
Other information
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.
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SEKO OMNI-CHANNEL LOGISTICS LIMITED
In connection with our audit of the financial statements, 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 there is a material misstatement 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.
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 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.
Matters on which we are required to report by exception
In 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 directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SEKO OMNI-CHANNEL LOGISTICS LIMITED
Responsibilities of Directors
As explained more fully in the Directors' Responsibilities Statement set out on page 4, 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 either the directors intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
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.
Based on our understanding of the company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: employment regulation, health and safety regulation, anti-money laundering regulation, non-compliance with implementation of government support schemes relating to COVID-19.
To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
• Inquiring of management and, where appropriate, those charged with governance, as to whether the company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
• Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
• Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
• Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.
We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation, pension legislation, the Companies Act 2006.
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SEKO OMNI-CHANNEL LOGISTICS LIMITED
In addition, we evaluated the directors’ and management’s incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of management override of controls, and determined that the principal risks related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, in particular in relation to revenue recognition (which we pinpointed to the assertion of cut-off), and significant one-off or unusual transactions.
Our audit procedures in relation to fraud included but were not limited to:
∙Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
∙Gaining an understanding of the internal controls established to mitigate risks related to fraud;
∙Discussing amongst the engagement team the risks of fraud; and
∙Addressing the risks of fraud through management override of controls by performing journal entry testing.
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of the audit report
This report is made solely to the Company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body for our audit work, for this report, or for the opinions we have formed.
Gerhard Bonthuys (Senior statutory auditor)
for and on behalf of Mazars LLP
Chartered Accountants & Statutory Auditor
2nd Floor
6 Sutton Plaza
Sutton Court Road
Sutton
Surrey
SM1 4FS
30 August 2022
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
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Interest payable and similar expenses
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Profit for the financial year
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Other comprehensive income
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Total comprehensive income for the year
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The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.
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The notes on pages 14 to 29 form part of these financial statements.
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
REGISTERED NUMBER: 08773821
BALANCE SHEET
AS AT 31 DECEMBER 2021
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Debtors: Amounts falling due within one year
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Creditors: Amounts falling due within one year
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Net current assets/(liabilities)
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Total assets less current liabilities
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Provisions for liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 14 to 29 form part of these financial statements.
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
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Comprehensive income for the year
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Other comprehensive income for the year
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Total comprehensive income for the year
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Comprehensive income for the year
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Other comprehensive income for the year
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Total comprehensive income for the year
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The notes on pages 14 to 29 form part of these financial statements.
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Seko Omni-Channel Logistics Limited (the "Company”) is a private company, limited by shares and incorporated in England and Wales. The address of its registered office is 30 Old Bailey, London, EC4M 7AU and the principal place of business is Minton Place, Victoria St, Windsor, SL4 1EG.
Seko Omni-Channel Logistics Limited are a leading provider of customer focused supply chain management and logistics solutions.
2.Accounting policies
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 applicable legislation as set out in the Companies Act 2006 and Schedule 1 of The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008. These financial statements have been prepared under the historical costs convention.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
These financial statements have been presented in Pounds Sterling and are rounded to the nearest pound, as this is the Company’s functional currency, being the currency of the primary economic environment in which the Company operates.
The following principal accounting policies have been applied:
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Financial reporting standard 102 - reduced disclosure exemptions
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The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙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 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Seko Logistics Group Limited as at 31 December 2021 and these financial statements may be obtained from Tower Bridge House, St Katharine's Way, London, United Kingdom, E1W 1DD.
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.Accounting policies (continued)
The results of the Company are set out in the Statement of Comprehensive Income above. The financial position of the Company, its liquidity position and its cash flows are reflected in the Balance Sheet.
The directors have assessed the current and forecasted trading activity and expected forecasted cashflows and have concluded that there is certainty that the company is expected to be able to continue to meet its obligations as they arise for the foreseeable future. The period that the directors have paid particular attention to was a period of no less than 12 months from the date of approval.
Potential sources of uncertainty noted by the directors include the withdrawal of the United Kingdom from the European Union, and Coronavirus and the COVID-19 pandemic. The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
Turnover is recognised at the fair value of the consideration received or receivable and represents amounts for the rendering of services in the normal course of business, net of discounts and other sales-related taxes.
Turnover from warehousing and distribution services.
Turnover is recognised from the provision of warehousing and distribution services over the period in which the services are provided.
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance Sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentation currency is Pounds Sterling.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
All foreign exchange gains and losses are presented in the Statement of Comprehensive Income within 'cost of sales'.
Tangible assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively 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 amount and are recognised in profit or loss.
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.Accounting policies (continued)
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Amortisation is provided on the following bases:
Amortisation charge for the year is included within 'administrative expenses'.
At each reporting date, the Company reviews the carrying value of its 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.
The recoverable amount of an asset is the higher of fair value less costs to sell and value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. The present value calculation involves estimating the future cash inflows and outflows to be derived from continuing use of the asset, and from its ultimate disposal, applying an appropriate discount rate to those future cash flows.
Where the recoverable amount of an asset is less than the carrying amount, an impairment loss is recognised immediately in profit or loss.
An impairment loss recognised for all assets is reversed in a subsequent year if, and only if, the reasons for the impairment loss have ceased to apply.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties and loans to related parties.
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.Accounting policies (continued)
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Financial instruments (continued)
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Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
- 18 -
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.Accounting policies (continued)
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
The UK government has offered a range of financial support packages to help companies, including government backed financing arrangements, furlough schemes, deferment of VAT payments and, for some sectors, business rates holidays, of the offered schemes, the Group used the furlough scheme and deferral of VAT payments. The income from the furlough scheme has been recognised within 'Other operating income'. They are recognised when the entity has reasonable assurance that they will comply with the conditions attaching the grant, and that the grant will be received.
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Judgements in applying accounting policies and key sources of estimation uncertainty
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In applying the Company’s accounting policies, the directors are required to make judgements, estimates and assumptions in determining the carrying amounts of assets and liabilities. The directors’ judgements, estimates and assumptions are based on the best and most reliable evidence available at the time when the decisions are made, and are based on historical experience and other factors that are considered to be applicable. Due to the inherent subjectivity involved in making such judgements, estimates and assumptions, the actual results and outcomes may differ.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised, if the revision affects only that year, or in the year of the revision and future years, if the revision affects both current and future years.
3.1 Critical judgements in applying the Company's accounting policies
The critical judgements that the directors have made in the process of applying the Company's accounting policies and that have the most significant effect on the amounts recognised in the statutory financial statements are discussed below.
(i) Assessing indicators of impairment
In assessing whether there have been any indicators of impairment of assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability. There have been no indicators of impairments identified during the current financial year.
3.2 Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
The directors do not consider there to be any key sources of estimation uncertainty.
- 19 -
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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An analysis of turnover by class of business is as follows:
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An analysis of the Company's turnover by geographical market is as follows:
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Government grants receivable
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The government grants receivable of £nil (2020: £126,743) relates to Coronavirus Job Retention Scheme (CJRS) the Company received during the year.
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The operating profit is stated after (crediting)/charging:
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Depreciation of tangible assets
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Amortisation of intangible assets
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Other operating lease rentals
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Foreign exchange (gains)/losses
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- 20 -
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Fees payable to the Company's auditor for the audit of the Company's annual financial statements
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The Company has taken advantage of the exemption not to disclose amounts paid for non audit services as these are disclosed in the group accounts of the parent Company.
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Staff costs were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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No directors received any remuneration from the Company during the year (2020: £nil).
The directors fees for the current as well as the previous year are borne by another group company.
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- 21 -
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Interest payable and similar expenses
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Other loan interest payable
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Finance leases and hire purchase contracts
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Current tax on profits for the year
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Adjustments in respect of previous periods
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Origination and reversal of timing differences
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- 22 -
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
10.Tax on profit (continued)
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Factors affecting tax charge for the year
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The tax assessed for the year is higher than (2020: higher than) the standard rate of corporation tax in the UK of19% (2020:19%). The differences are explained below:
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Profit multiplied by standard rate of corporation tax in the UK of 19% (2020: 19%)
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Fixed asset timing differences
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Adjustments to tax charge in respect of prior periods
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Remeasurement of deferred tax for changes in tax rates
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Total tax charge for the year
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Factors that may affect future tax charges
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The UK Government announced in the 2021 budget that from 1 April 2023, the rate of corporation tax in the United Kingdom will increase from 19% to 25%. Companies with profits of £50,000 or less will continue to be taxed at 19%, which is a new small profits rate. Where taxable profits are between £50,000 and £250,000, the higher 25% rate will apply but with a marginal relief applying as profits increase.
- 23 -
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 24 -
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Amounts owed by group companies
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Amounts owed by parent company
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Prepayments and accrued income
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Trade debtors are stated after a provision for bad debts of £21,619 (2020: £254,993).
Amounts owed by group companies are unsecured, interest-free and payable on demand.
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- 25 -
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Creditors: Amounts falling due within one year
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Amounts due to group companies
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Other taxation and social security
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Accruals and deferred income
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Amounts due to group companies are unsecured, interest-free and repayable on demand.
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Charged to Statement of Comprehensive Income
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- 26 -
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
15.Deferred taxation (continued)
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The deferred tax balance is made up as follows:
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Fixed asset timing differences
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Short term timing differences
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Deferred tax (liability)/asset
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The Company has recognised deferred tax assets in respect of all deductible timing differences. There are no amounts unrecognised (2020: £nil). These timing differences are recognised as a deferred asset on the grounds that there is sufficient evidence that the asset will be reversible against suitable future profits.
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Allotted, called up and not fully paid
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1,000 (2020: 1,000) Allocated, called-up and not fully paid shares of £1.00 each
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The Company has one class of ordinary shares; each share carries one voting right per share but no right to fixed income.
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Profit and loss account
This reserve represents the cumulative profits and losses.
- 27 -
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £69,879 (2020: £59,310). Contributions totalling £1,433 (2020: £1,855) were payable to the fund at the balance sheet date and are included in creditors.
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Commitments under operating leases
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At 31 December 2021 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Other financial commitments
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On 19 April 2021 as security for its loans to the Company, the Company granted RBS Invoice Finance Limited a charge which was fixed over land and intellectual property both present and future, and floating over all assets and undertakings both present and future. The terms of the charge require that its validity shall continue until all liabilities secured by the charge have been satisfied.
- 28 -
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SEKO OMNI-CHANNEL LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Related party transactions
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During the year the Company entered into the following transactions with related parties:
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Transactions with group undertakings
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Services rendered (by) group undertakings
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Services rendered to group undertakings
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At 31 December 2021 the following balances were owed by/(to) related parties:
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Amount due (to)/from group undertakings
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Included within creditors
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Amount due from controlling party
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Post balance sheet events
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On 24 February 2022 Russian Forces entered Ukraine, resulting in Western Nation reactions including announcements of sanctions against Russia and Russian interests worldwide and an economic ripple effect on the global economy. The directors have carried out an assessment of the potential impact of Russian Forces entering Ukraine on the business, including the impact of mitigation measures and uncertainties, and have concluded that this is a non-adjusting post balance sheet event.
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Parent undertaking and ultimate controlling party
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The ultimate parent company is Seko Global Logistics Network, LLC (SGLN), a company incorporated in the United States of America.
The results of the Company are consolidated by the immediate parent company Seko Logistics Group Limited incorporated in England. The consolidated financial statements of Seko Logistics Group Limited are publicly available and may be obtained from Companies House.
- 29 -
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