GENCO LOGISTICS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Company Registration No. 05098046 (England and Wales)
GENCO LOGISTICS LIMITED
COMPANY INFORMATION
Directors
Mr M Gleig
Mr C Lythgoe
Mr L Gerard
Secretary
Mr M Gleig
Company number
05098046
Registered office
Castle Chambers
43 Castle Street
Livepool
L2 9TL
Auditor
DSG
Castle Chambers
43 Castle Street
Liverpool
L2 9TL
GENCO LOGISTICS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 23
GENCO LOGISTICS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -
The directors present the strategic report for the year ended 31 March 2023.
Principal activity and fair review of the business
The principal activity of the company continued to be that of providing a complete logistics package in relation to imports and exports of freight by land, sea and air.
The directors considered the results for the year and the financial position at the year end to be satisfactory.
As shown in the profit and loss account, turnover for the year has decreased by almost 50%. This decrease however is entirely attributable to the downturn in worldwide freight shipping rates, which were exceptionally high in 2021/2. Import and export volumes with customers have remained constant. Although Operating profit in 2023 is down to £1.4m, this constitutes a 25% increase on the Operating profit achieved in 2021.
The balance sheet has remained strong with net assets of £2.3m (2022 £2.3m).
Principal risks and uncertainties
There are a number of risks and uncertainties that can impact on the performance of GenCo Logistics Limited, some of which are beyond the control of the company.
The directors consider two of the most significant risks faced by the company are the knock on impact of the UK’s withdrawal from the European Union and the economic disruption caused by current global affairs.For example, export project work to Russia has ceased due to the war with Ukraine.These risks are managed by the Board as a whole and are the subject of regular board meetings.
The directors continue to monitor the continued operational challenges posed by worldwide events including, but not restricted to, an assessment of the robustness of their supply chain and broader logistic arrangements as well as the continued impact this might have on going concern. However, the directors do not foresee any continued operational pressures to be caused by such events or any material impact on the company.
The company monitors market trends and risks on an ongoing basis and takes corrective action as and when required.
Competitive pressure in all the markets it operates in are an ongoing risk to the company. To manage this risk the company maintains strong relationships with its customers with high levels of customer service.
Fluctuations in freight rates will always impact upon the profitability of the business. Purchasing policies and practices mitigate, where practicable, these risks. Post year end the company has continued to trade well even with the downturn in worldwide freight rates.
In addition to the above, there are also the following principal risks:
Liquidity risk
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Interest rate risk
The company is cash positive and has no overdraft facility or borrowings.
Foreign currency risk
The company’s principal foreign currency exposures arise from trading with overseas companies. Company policy permits but does not demand that these exposures may be hedged in order to fix the cost in sterling. This hedging activity involves the use of foreign exchange forward contracts.
Credit risk
Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
GENCO LOGISTICS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
Key performance indicators
Key performance indicators continue to be used throughout the business, and the financial indicators such as turnover, gross profit margin, profit before tax and trade debtors are set out in the body of the accounts.
The cash balance at the year end was positive and the company maintains strong cash control which has enabled it to meet its obligations to suppliers and other creditors as they fall due.
The directors also consider other non-financial indicators to monitor the performance of the business. These include the company’s ability to react to market conditions with a flexible approach to their service capabilities.
Employees - The company continues to invest in its strategies for the training, development and retention of employees. Average headcount for 2023 was 18 (2022: 21).
Mr C Lythgoe
Director
18 October 2023
GENCO LOGISTICS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 March 2023.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £1,100,000. 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 M Gleig
Mr C Lythgoe
Mr L Gerard
Future developments
The general economic climate is still challenging and looks likely to be difficult throughout the coming year. However, the directors are committed to developing the business through continued investment in strong systems and expert personnel to ensure the highest standards of customer care.
Auditor
The auditor, DSG, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of the company's principal activity and financial risk management policies.
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr C Lythgoe
Director
18 October 2023
GENCO LOGISTICS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
GENCO LOGISTICS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GENCO LOGISTICS LIMITED
- 5 -
Opinion
We have audited the financial statements of GenCo Logistics Limited (the 'company') for the year ended 31 March 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
GENCO LOGISTICS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GENCO LOGISTICS LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Discussions were held with, and enquiries made of, management and those charged with governance with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the company.
The following laws and regulations were identified as being of significance to the company:
Those laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, Company Law, Tax and Pensions legislation, and distributable profits legislation.
Those laws and regulations for which non-compliance may be fundamental to the operating aspects of the company and therefore may have a material effect on the financial statements include quality management systems regulations, health and safety legislation and General Data Protection requirements.
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: enquiries of management and those charged with governance as to whether the company complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; review of board minutes; testing the appropriateness of entries in the nominal ledger, including journal entries; reviewing transactions around the end of the reporting period; and the performance of analytical procedures to identify unexpected movements in account balances which may be indicative of fraud.
GENCO LOGISTICS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GENCO LOGISTICS LIMITED
- 7 -
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the company’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Jean Ellis BA FCA CTA
Senior Statutory Auditor
For and on behalf of DSG
18 October 2023
Chartered Accountants
Statutory Auditor
Castle Chambers
43 Castle Street
Liverpool
L2 9TL
GENCO LOGISTICS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
23,710,199
46,956,522
Cost of sales
(20,429,837)
(39,486,320)
Gross profit
3,280,362
7,470,202
Administrative expenses
(1,856,486)
(2,416,904)
Operating profit
4
1,423,876
5,053,298
Interest receivable and similar income
6
26,009
200
Interest payable and similar expenses
8
(116)
(616)
Profit before taxation
1,449,769
5,052,882
Tax on profit
9
(315,000)
(977,804)
Profit for the financial year
1,134,769
4,075,078
The profit and loss account has been prepared on the basis that all operations are continuing operations.
GENCO LOGISTICS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 9 -
2023
2022
£
£
Profit for the year
1,134,769
4,075,078
Other comprehensive income
-
-
Total comprehensive income for the year
1,134,769
4,075,078
GENCO LOGISTICS LIMITED
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
7,834
6,226
Current assets
Debtors
12
2,854,815
9,365,938
Cash at bank and in hand
4,725,556
6,310,888
7,580,371
15,676,826
Creditors: amounts falling due within one year
13
(5,278,443)
(13,408,059)
Net current assets
2,301,928
2,268,767
Total assets less current liabilities
2,309,762
2,274,993
Provisions for liabilities
Deferred tax liability
14
1,557
1,557
(1,557)
(1,557)
Net assets
2,308,205
2,273,436
Capital and reserves
Called up share capital
16
100
100
Profit and loss reserves
2,308,105
2,273,336
Total equity
2,308,205
2,273,436
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true
The financial statements were approved by the board of directors and authorised for issue on 18 October 2023 and are signed on its behalf by:
Mr C Lythgoe
Director
Company registration number 05098046 (England and Wales)
GENCO LOGISTICS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2021
100
2,198,258
2,198,358
Year ended 31 March 2022:
Profit and total comprehensive income
-
4,075,078
4,075,078
Dividends
10
-
(4,000,000)
(4,000,000)
Balance at 31 March 2022
100
2,273,336
2,273,436
Year ended 31 March 2023:
Profit and total comprehensive income
-
1,134,769
1,134,769
Dividends
10
-
(1,100,000)
(1,100,000)
Balance at 31 March 2023
100
2,308,105
2,308,205
GENCO LOGISTICS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
20
547,077
10,355,510
Interest paid
(116)
(616)
Income taxes paid
(978,129)
(422,092)
Net cash (outflow)/inflow from operating activities
(431,168)
9,932,802
Investing activities
Purchase of tangible fixed assets
(8,387)
(2,403)
Receipts arising from loans made
(71,786)
(16,807)
Interest received
26,009
200
Net cash used in investing activities
(54,164)
(19,010)
Financing activities
Draw down/(repayment) of bank loans
(480,000)
Dividends paid
(1,100,000)
(4,000,000)
Net cash used in financing activities
(1,100,000)
(4,480,000)
Net (decrease)/increase in cash and cash equivalents
(1,585,332)
5,433,792
Cash and cash equivalents at beginning of year
6,310,888
877,096
Cash and cash equivalents at end of year
4,725,556
6,310,888
GENCO LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 13 -
1
Accounting policies
Company information
GenCo Logistics Limited is a private company limited by shares incorporated in England and Wales. The registered office is c/o DSG Chartered Accountants, Castle Chambers, 43 Castle Street, Liverpool, L2 9TL.
The principal activity of the company is disclosed in the strategic report.
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 £1.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
At 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 as follows:
Turnover is stated exclusive of value added tax.
Revenue from freight services is recognised when the significant risks and rewards of ownership of the services have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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.
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:
Fixtures and fittings
20% straight line
Computer equipment
33.3% 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.
GENCO LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 14 -
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
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.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
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.
GENCO LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities 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
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.
1.8
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.
GENCO LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 16 -
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.10
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.
1.11
Retirement benefits
The company operates a defined contribution scheme for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable.
1.12
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.
1.13
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.
GENCO LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 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.
The directors do not consider there to be any material accounting estimates and judgements required in the application of accounting policies.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Freight services provided
23,710,199
46,956,522
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
22,779,320
45,923,771
Rest of Europe
166,888
245,714
Rest of World
763,991
787,037
23,710,199
46,956,522
2023
2022
£
£
Other revenue
Interest income
26,009
200
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(42,673)
34,662
Fees payable to the company's auditor for the audit of the company's financial statements
8,500
7,700
Depreciation of owned tangible fixed assets
6,779
6,231
Operating lease charges
57,280
64,507
GENCO LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 18 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Admin
3
4
Sales
15
17
Total
18
21
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,061,044
1,752,816
Social security costs
81,931
257,487
Pension costs
153,167
47,231
1,296,142
2,057,534
6
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
25,834
200
Other interest income
175
Total income
26,009
200
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
25,834
200
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
346,700
53,093
Company pension contributions to defined contribution schemes
3,988
9,275
350,688
62,368
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 3).
GENCO LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
7
Directors' remuneration
(Continued)
- 19 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
155,554
250,297
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
-
482
Other finance costs:
Other interest
116
134
116
616
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
315,000
978,158
Deferred tax
Origination and reversal of timing differences
(354)
Total tax charge
315,000
977,804
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
1,449,769
5,052,882
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
275,456
960,048
Tax effect of expenses that are not deductible in determining taxable profit
39,544
18,110
Permanent capital allowances in excess of depreciation
(354)
Taxation charge for the year
315,000
977,804
GENCO LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
9
Taxation
(Continued)
- 20 -
In the Budget of 3 March 2021, the Chancellor of the Exchequer announced that the main rate of corporation tax would increase to 25%, with effect from 1 April 2023. This increase in rate was included within Finance Act 2021, which was substantively enacted on 24 May 2021. Accordingly, deferred tax balances as at 31 March 2023 are now calculated at this increased rate.
10
Dividends
2023
2022
£
£
Final paid
1,100,000
4,000,000
11
Tangible fixed assets
Fixtures and fittings
Computer equipment
Total
£
£
£
Cost
At 1 April 2022
17,450
67,486
84,936
Additions
4,997
3,390
8,387
At 31 March 2023
22,447
70,876
93,323
Depreciation and impairment
At 1 April 2022
17,050
61,660
78,710
Depreciation charged in the year
1,234
5,545
6,779
At 31 March 2023
18,284
67,205
85,489
Carrying amount
At 31 March 2023
4,163
3,671
7,834
At 31 March 2022
400
5,826
6,226
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,478,788
8,228,811
Other debtors
142,326
135,574
Prepayments and accrued income
233,701
1,001,553
2,854,815
9,365,938
Included within other debtors is a director's loan account, which was overdrawn at the year end date by £88,593 (2022: £16,807). The maximum overdrawn balance during the year was £88,593.
GENCO LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 21 -
13
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
1,243,525
8,512,753
Amounts owed to parent undertaking
3,039,713
3,055,664
Corporation tax
315,029
978,158
Other taxation and social security
23,618
37,946
Other creditors
8,001
920
Accruals and deferred income
648,557
822,618
5,278,443
13,408,059
Amounts owed to parent undertaking are unsecured, interest free and payable on demand.
14
Deferred taxation
The following are the major deferred tax liabilities recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
1,557
1,557
There were no deferred tax movements in the year.
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
15
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
153,167
47,231
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
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
GENCO LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 22 -
17
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
43,660
20,573
Between two and five years
50,175
17,779
93,835
38,352
18
Related party transactions
At the year end a director owed £88,593 (2022: £16,807) to the company.
The company has taken advantage of the exemption conferred by section 33.1A of FRS 102 not to disclose transactions with other group undertakings as consolidated accounts will be publicly available.
19
Ultimate controlling party
The company is a wholly owned subsidiary of Meholdingcompany Limited.
The smallest and largest group into which the results of this entity are consolidated is that headed by Meholdingcompany Limited.
The ultimate controlling party is Mr C Lythgoe.
20
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
1,134,769
4,075,078
Adjustments for:
Taxation charged
315,000
977,804
Finance costs
116
616
Investment income
(26,009)
(200)
Depreciation and impairment of tangible fixed assets
6,779
6,231
Movements in working capital:
Decrease/(increase) in debtors
6,582,909
(4,215,391)
(Decrease)/increase in creditors
(7,466,487)
9,511,372
Cash generated from operations
547,077
10,355,510
GENCO LOGISTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 23 -
21
Analysis of changes in net funds
1 April 2022
Cash flows
31 March 2023
£
£
£
Cash at bank and in hand
6,310,888
(1,585,332)
4,725,556
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