Company registration number 01953010 (England and Wales)
LOMBARD SHIPPING PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
LOMBARD SHIPPING PLC
COMPANY INFORMATION
Directors
Mr S Fraser
Mr A Foulkes
Mr K Blood
Mr P Fraser
Secretary
Mrs S Fraser
Company number
01953010
Registered office
Lombard House
Whitehouse Business Centre
Lovetofts Drive
IPSWICH
Suffolk
IP1 5SF
Auditor
BG Audit LLP
Statutory Auditors
7 Three Rivers Business Park
Felixstowe Road, Foxhall
IPSWICH
IP10 0BF
Business address
Lombard House
Whitehouse Business Centre
Lovetofts Drive
IPSWICH
Suffolk
IP1 5SF
LOMBARD SHIPPING PLC
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of total comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 25
LOMBARD SHIPPING PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 1 -
The directors present the strategic report for the year ended 31 May 2023.
Fair review of the business
Turnover in the year was £17,282,771. Overall gross profit for the year was 19.90%.
The Company continued to maintain a strong and varied customer base throughout the year through its commitment to service.
The Company continues to carefully manage its own cost base and improve operating efficiencies, to remain cost-effective and competitive in the market.
Although Deep-Sea Ocean Freight rates fell dramatically during the year, there was little increase in booking numbers from clients, as speculation of a pending recession throughout the year dampened trading appetite.
Container haulage availability improved during the year and rates stabilised, because of reduced import volumes.
The Directors are confident that the Company remains well placed to take advantage of any upturn in trade.
Principal risks and uncertainties
With inflation at its highest since 1990, consumer demand remains subdued, impacting freight volumes across all the markets we serve. Interest rate increases intended to reduce inflation could give rise to some businesses failing, presenting risks, as well as opportunities.
The general downturn in logistics trade volumes has eased the pressure on driver recruitment and retention but fuel costs are likely to remain high and volatile as a consequence of various international events.
Development and performance
The Directors are satisfied that the Company continues to develop customer loyalty through quality of service and are actively seeking to grow the Company organically within its core activities of shipping & forwarding, warehousing and distribution, whilst also seeking to continue improving the utilisation of equipment and facilities and provide innovative solutions for our customers.
Key performance indicators
The Directors are satisfied that customer service and satisfaction and key performance indicators, continue to be at or above the industry standard.
The Directors do not consider turnover, of itself, to be a key performance indicator, however, the key financial highlights are as follows:
Gross profit £3,438,726
Net Profit % 1.93%
LOMBARD SHIPPING PLC
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 2 -
Section 172 (1) statement
Section 172 of the Companies Act 2006 requires a director of a company to act in the way he or she considers, in good faith, would most likely promote the success of the company for the benefit of its members as a whole. In doing this section 172 requires Directors to have regard to, amongst other matters, the:
(a) likely consequences of any decisions in the long-term;
(b) interests of the company’s employees;
(c) need to foster the company’s business relationships with suppliers, customers and others;
(d) impact of the company’s operations on the community and environment;
(e) desirability of the company maintaining a reputation for high standards of business conduct; and
(f) need to act fairly as between members of the company.
In discharging their section 172 duties the Directors have regard to the factors set out above. By considering the company’s purpose, vision and values together with its strategic priorities and having a process in place for decision-making, the Directors aim to make sure that their decisions are consistent and appropriate in all circumstances.
Board meetings, where the Directors consider the company’s activities and make decisions are held regularly. As a part of those meetings the Directors receive information on issues relevant to section 172 matters when making decisions. For example, the views of and the impact of the company’s activities on its stakeholders are an important consideration for the Directors when making relevant decisions. Also, during the year the Directors continued discussions on a three-year business plan that considers the importance of the company’s employees and their interests.
Mr S Fraser
Director
27 November 2023
LOMBARD SHIPPING PLC
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 May 2023.
Principal activities
The principal activities of the business during the year continued to be that of international logistics providers.
Effective from 1st January 2021, the Company branch office in Southern Ireland commenced trading as an Irish-registered Company, Lombard Shipping Limited.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr S Fraser
Mr A Foulkes
Mr K Blood
Mr P Fraser
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £80,000. The directors do not recommend payment of a further dividend.
Post reporting date events
No significant events have occurred between 31 May 2023 and the date of authorisation of these financial statements.
Auditor
The auditor, BG Audit LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr S Fraser
Director
27 November 2023
LOMBARD SHIPPING PLC
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MAY 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;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements.
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.
LOMBARD SHIPPING PLC
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LOMBARD SHIPPING PLC
- 5 -
Opinion
We have audited the financial statements of Lombard Shipping Plc (the 'company') for the year ended 31 May 2023 which comprise 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 May 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.
LOMBARD SHIPPING PLC
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LOMBARD SHIPPING PLC
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Company’s industry and activities, we identified the principal risks of non-compliance with laws and regulations, and considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that impact directly on the preparation of the financial statements including the Companies Act, and UK tax legislation.
We considered the opportunities for fraudulent adjustments to the financial statements including override of controls and determined that the principal risks were related to fraudulent transactions that would result in the manipulation of profits.
Audit procedures included:
Making enquiries of management for known or suspected instances of fraud or non-compliance with laws and regulations.
Consideration of management’s procedures for detecting and preventing fraud, including controls.
Reviewing journal entries to identify material or unusual transactions
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
LOMBARD SHIPPING PLC
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LOMBARD SHIPPING PLC
- 7 -
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Roger Beaton F.C.A. (Senior Statutory Auditor)
For and on behalf of BG Audit LLP
27 November 2023
Statutory Auditor
7 Three Rivers Business Park
Felixstowe Road, Foxhall
IPSWICH
IP10 0BF
LOMBARD SHIPPING PLC
STATEMENT OF TOTAL COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
17,282,771
17,543,484
Cost of sales
(13,844,045)
(13,879,543)
Gross profit
3,438,726
3,663,941
Administrative expenses
(3,079,560)
(3,248,545)
Other operating income
4,800
Operating profit
4
363,966
415,396
Interest receivable and similar income
8
1,229
9
Interest payable and similar expenses
9
(31,492)
(61,522)
Profit before taxation
333,703
353,883
Taxation
10
(108,445)
(69,715)
Profit for the financial year
225,258
284,168
Total comprehensive income for the year
225,258
284,168
The profit and loss account has been prepared on the basis that all operations are continuing operations.
LOMBARD SHIPPING PLC
BALANCE SHEET
AS AT 31 MAY 2023
31 May 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
2,098,229
2,289,041
Current assets
Debtors
14
2,991,131
3,770,016
Cash at bank and in hand
771,876
651,639
3,763,007
4,421,655
Creditors: amounts falling due within one year
15
(2,890,120)
(3,515,232)
Net current assets
872,887
906,423
Total assets less current liabilities
2,971,116
3,195,464
Creditors: amounts falling due after more than one year
16
(256,202)
(648,182)
Provisions for liabilities
18
(310,061)
(287,687)
Net assets
2,404,853
2,259,595
Capital and reserves
Called up share capital
21
100,000
100,000
Profit and loss reserves
2,304,853
2,159,595
Total equity
2,404,853
2,259,595
The financial statements were approved by the board of directors and authorised for issue on 27 November 2023 and are signed on its behalf by:
Mr S Fraser
Director
Company Registration No. 01953010
LOMBARD SHIPPING PLC
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 June 2021
100,000
1,875,427
1,975,427
Year ended 31 May 2022:
Profit and total comprehensive income for the year
-
284,168
284,168
Balance at 31 May 2022
100,000
2,159,595
2,259,595
Year ended 31 May 2023:
Profit and total comprehensive income for the year
-
225,258
225,258
Dividends
11
-
(80,000)
(80,000)
Balance at 31 May 2023
100,000
2,304,853
2,404,853
LOMBARD SHIPPING PLC
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
775,763
436,339
Interest paid
(31,492)
(61,522)
Income taxes paid
(84,608)
(128,847)
Net cash inflow from operating activities
659,663
245,970
Investing activities
Purchase of tangible fixed assets
(94,722)
(172,284)
Proceeds from disposal of tangible fixed assets
33,139
113,958
Purchase of subsidiaries
90
Interest received
1,229
9
Net cash used in investing activities
(60,354)
(58,227)
Financing activities
Payment of finance leases obligations
(206,297)
(156,763)
Dividends paid
(80,000)
Net cash used in financing activities
(286,297)
(156,763)
Net increase in cash and cash equivalents
313,012
30,980
Cash and cash equivalents at beginning of year
300,776
269,796
Cash and cash equivalents at end of year
613,788
300,776
Relating to:
Cash at bank and in hand
771,876
651,639
Bank overdrafts included in creditors payable within one year
(158,088)
(350,863)
LOMBARD SHIPPING PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
- 12 -
1
Accounting policies
Company information
Lombard Shipping Plc is a private company limited by shares incorporated in England and Wales. The registered office is Lombard House, Whitehouse Business Centre, Lovetofts Drive, IPSWICH, Suffolk, IP1 5SF. The company number is 01953010.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents amounts receivable for services net of VAT and trade discounts. Turnover is recognised on the delivery of those services, which is on completion of the shipping or transport operation.
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:
Land and buildings Leasehold
2-10 years straight line or straight line over the life of the lease
Plant and machinery
20% straight line and 20% reducing balance
Fixtures, fittings & equipment
20% straight line
Computer equipment
10-33% straight line
Motor vehicles
20% reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
LOMBARD SHIPPING PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 13 -
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 at bank and in hand
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.
LOMBARD SHIPPING PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 14 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
LOMBARD SHIPPING PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 15 -
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.
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.
1.10
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
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.
LOMBARD SHIPPING PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 16 -
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.14
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.15
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.
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. These include judgements relating to the amount of dilapidation provisions. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Sales
17,282,771
17,543,484
LOMBARD SHIPPING PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
3
Turnover and other revenue
(Continued)
- 17 -
2023
2022
£
£
Turnover analysed by geographical market
UK
10,819,169
11,954,382
Europe
2,035,578
1,815,805
Rest of World
4,428,024
3,773,297
17,282,771
17,543,484
2023
2022
£
£
Other revenue
Interest income
1,229
9
Grants received
4,800
-
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
28,567
10,219
Government grants
(4,800)
-
Depreciation of owned tangible fixed assets
175,150
224,895
Depreciation of tangible fixed assets held under finance leases
128,361
137,386
Profit on disposal of tangible fixed assets
(4,616)
(26,625)
Operating lease charges
1,002,445
908,649
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
14,000
11,700
For other services
All other non-audit services
2,750
2,350
LOMBARD SHIPPING PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 18 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Office (including management)
7
7
Operations
32
36
Warehouse and drivers
48
51
Total
87
94
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
3,443,459
3,463,404
Social security costs
329,052
323,847
Pension costs
106,426
87,914
3,878,937
3,875,165
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
318,011
399,994
Company pension contributions to defined contribution schemes
8,308
6,589
326,319
406,583
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
107,291
180,374
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
1,229
9
LOMBARD SHIPPING PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
8
Interest receivable and similar income
(Continued)
- 19 -
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
1,229
9
9
Interest payable and similar expenses
2023
2022
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
19,263
21,834
Other interest
12,229
39,688
31,492
61,522
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
92,171
84,608
Deferred tax
Origination and reversal of timing differences
16,274
(14,893)
Total tax charge
108,445
69,715
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
333,703
353,883
Expected tax charge based on the standard rate of corporation tax in the UK of 20.00% (2022: 19.00%)
66,741
67,238
Tax effect of expenses that are not deductible in determining taxable profit
790
2,756
Effect of change in corporation tax rate
38,313
Depreciation on assets not qualifying for tax allowances
4,136
4,013
Capital Allowances at enhanced rate
(1,535)
(4,292)
Taxation charge for the year
108,445
69,715
LOMBARD SHIPPING PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 20 -
11
Dividends
2023
2022
£
£
Final paid
80,000
12
Tangible fixed assets
Land and buildings Leasehold
Plant and machinery
Fixtures, fittings & equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 June 2022
1,046,119
1,663,843
377,373
222,378
1,978,523
5,288,236
Additions
6,747
10,200
4,282
2,880
117,113
141,222
Disposals
(16,855)
(2,113)
(98,110)
(117,078)
At 31 May 2023
1,052,866
1,657,188
381,655
223,145
1,997,526
5,312,380
Depreciation and impairment
At 1 June 2022
60,117
1,290,700
281,149
173,884
1,193,345
2,999,195
Depreciation charged in the year
15,319
78,507
23,330
20,329
166,026
303,511
Eliminated in respect of disposals
(11,443)
(1,263)
(75,849)
(88,555)
At 31 May 2023
75,436
1,357,764
304,479
192,950
1,283,522
3,214,151
Carrying amount
At 31 May 2023
977,430
299,424
77,176
30,195
714,004
2,098,229
At 31 May 2022
986,002
373,143
96,224
48,494
785,178
2,289,041
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Motor vehicles
505,064
549,544
13
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
2,752,469
3,503,152
Carrying amount of financial liabilities
Measured at amortised cost
2,956,605
3,997,311
LOMBARD SHIPPING PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 21 -
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,108,355
2,722,915
Amounts owed by group undertakings
181,036
386,419
Other debtors
18,752
48,809
Prepayments and accrued income
238,662
258,324
2,546,805
3,416,467
2023
2022
Amounts falling due after more than one year:
£
£
Amounts owed by group undertakings
444,326
353,549
Total debtors
2,991,131
3,770,016
Included in trade debtors is £1,027,630 (2022: £1,631,064) relating to amounts outstanding on an invoice discounting agreement.
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
158,088
350,863
Obligations under finance leases
17
268,321
190,929
Trade creditors
1,801,505
2,063,990
Corporation tax
92,171
84,608
Other taxation and social security
97,546
81,495
Other creditors
245,786
281,823
Accruals and deferred income
226,703
461,524
2,890,120
3,515,232
The bank overdraft is secured by fixed and floating charge over the assets of the company.
Net obligations under hire purchase contracts are secured on the assets concerned.
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
17
97,810
334,999
Other creditors
158,392
313,183
256,202
648,182
LOMBARD SHIPPING PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
16
Creditors: amounts falling due after more than one year
(Continued)
- 22 -
Net obligations under hire purchase contracts are secured on the assets concerned. Other creditors are secured against the leasehold property.
17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
268,321
190,929
In two to five years
97,810
334,999
366,131
525,928
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
18
Provisions for liabilities
2023
2022
Notes
£
£
Dilapidation provision
154,700
148,600
Deferred tax liabilities
19
155,361
139,087
310,061
287,687
Movements on provisions apart from deferred tax liabilities:
£
At 1 June 2022
148,600
Additional provisions in the year
6,100
At 31 May 2023
154,700
19
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2023
2022
Balances:
£
£
ACAs
155,361
139,087
LOMBARD SHIPPING PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
19
Deferred taxation
(Continued)
- 23 -
2023
Movements in the year:
£
Liability at 1 June 2022
139,087
Charge to profit or loss
16,274
Liability at 31 May 2023
155,361
The net deferred tax liability expected to reverse in the year ended 31st May 2024 is estimated at £34,494. This primarily relates to the reversal of timing differences on acquired tangible assets and capital allowances through depreciation, offset by expected tax deductions when payments are made to utilise provisions.
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
106,426
87,914
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.
21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
95,000
95,000
95,000
95,000
Ordinary B shares of £1 each
5,000
5,000
5,000
5,000
100,000
100,000
100,000
100,000
There are two classes of ordinary shares. There are no restrictions on the distribution of dividends and the repayment of capital.
22
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
611,376
427,670
Between two and five years
1,042,695
1,239,073
1,654,071
1,666,743
LOMBARD SHIPPING PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
22
Operating lease commitments
(Continued)
- 24 -
In addition to the above the company has commitments over 5 years relating to a lease entered into in July 2019. The term of the lease is 125 years and rent of £34,000 is payable per annum (subject to review). The rent review will be carried out on the 10th anniversary of the term and every 10 years thereafter.
23
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2023
2022
£
£
Aggregate compensation
382,451
445,250
During the year the company paid rent of £138,833 (2022: £123,000) to Lombard Shipping Executive Pension Scheme. S Fraser is a trustee of Lombard Shipping Executive Pension Scheme.
Included in other creditors at the year end is £312,473 (2022: £463,069) owed to Lombard Shipping Executive Pension Scheme.
The company is exempt from disclosing other related party transactions as they are with other group companies that are wholly owned within the group.
24
Ultimate controlling party
The company is a 100% subsidiary of Whitcott Holdings Limited, a company incorporated in the United Kingdom. The registered office is Lombard House Whitehouse Business Centre, Lovetofts Drive, Ipswich, Suffolk, United Kingdom, IP1 5SF. The ultimate controlling party is Mr S. Fraser, the majority shareholder of Whitcott Holdings Limited.
LOMBARD SHIPPING PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 25 -
25
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
225,258
284,168
Adjustments for:
Taxation charged
108,445
69,715
Finance costs
31,492
61,522
Investment income
(1,229)
(9)
Gain on disposal of tangible fixed assets
(4,616)
(26,625)
Depreciation and impairment of tangible fixed assets
303,511
362,281
Increase in provisions
6,100
20,223
Movements in working capital:
Decrease/(increase) in debtors
778,885
(428,404)
(Decrease)/increase in creditors
(672,083)
93,468
Cash generated from operations
775,763
436,339
The company has acquired tangible assets under finance leases. £46,750 (2022: £49,000) has been capitalised as the cost of the asset.
26
Analysis of changes in net funds/(debt)
1 June 2022
Cash flows
New finance leases
31 May 2023
£
£
£
£
Cash at bank and in hand
651,639
120,237
-
771,876
Bank overdrafts
(350,863)
192,775
-
(158,088)
300,776
313,012
613,788
Obligations under finance leases
(525,928)
206,297
(46,500)
(366,131)
(225,152)
519,309
(46,500)
247,657
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