Company Registration No. 02332841 (England and Wales)
HEMISPHERE FREIGHT SERVICES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
LB GROUP
The Octagon Suite E2
2nd Floor Middleborough
Colchester
Essex
CO1 1TG
HEMISPHERE FREIGHT SERVICES LIMITED
COMPANY INFORMATION
Directors
Mr A Perrin
Mr D Norris
Mr D Salt
Mr L Perrin
Mr C Perrin
Secretary
Mrs T Perrin
Company number
02332841
Registered office
Hemisphere House
53-65 White House Road
Ipswich
Suffolk
UK
IP1 5PB
Auditor
LB Group (Colchester)
The Octagon Suite E2
2nd Floor Middleborough
Colchester
Essex
CO1 1TG
HEMISPHERE FREIGHT SERVICES LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of total comprehensive income
8
Statement of financial position
9
Statement of changes in equity
10
Notes to the financial statements
11 - 24
HEMISPHERE FREIGHT SERVICES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 1 -
The directors present the strategic report for the year ended 30 June 2023.
Review of the business
During the year turnover decreased by 22.07% (2022: increase by 63.42%) and the company achieved a gross profit margin of 26.86% (2022: 19.07%).
Profit before tax has decreased to £1,553,280 from £1,969,202.
Principal risks and uncertainties
The main risk to the company continues to be the general condition of the economy but the directors are confident that the company is well placed to deal with any issues as they arise, given the increased strength of the company's balance sheet.
Development and performance
The company's aim is to continue to achieve growth in terms of market share and profitability in future years.
Key performance indicators
Given the straight forward nature of the business, the company's directors are of the opinion that a more detailed analysis, using key performance indicators, is not necessary to understand the development, performance or position of the business.
Future developments
The company now holds certification with ISO 9001 after stringent review of its internal quality management procedures.
ISO 9001 is an internationally recognized Quality Management System (QMS) standard that is designed to streamline operations, reduce costs, satisfy more customers and promote effective relationships between the company and its stakeholders and supply chain.
On behalf of the directors
Mr A Perrin
Director
1 February 2024
HEMISPHERE FREIGHT SERVICES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2023
- 2 -
The directors present their annual report and financial statements for the year ended 30 June 2023.
Principal activities
The principal activity of the company continued to be that of a haulage and logistics provider.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr A Perrin
Mr D Norris
Mr D Salt
Mr L Perrin
Mr C Perrin
Results and dividends
The results for the year are set out on page 8.
The reported profit before tax for the year amounted to £1,553,280 (2022: £1,969,202). Dividends of £165,800 (2022: £165,800) have been paid to Perrin Group Holdings Limited.
Auditor
The auditor, LB Group (Colchester), are deemed to be reappointed under section 487(2) of the Companies Act 2006.
Each of the persons who is a director at the date of approval of this report confirm that:
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.
HEMISPHERE FREIGHT SERVICES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 3 -
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 future developments and post balance sheet events.
On behalf of the board
Mr A Perrin
Director
1 February 2024
HEMISPHERE FREIGHT SERVICES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 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.
HEMISPHERE FREIGHT SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HEMISPHERE FREIGHT SERVICES LIMITED
- 5 -
Opinion
We have audited the financial statements of Hemisphere Freight Services Limited (the 'company') for the year ended 30 June 2023 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 30 June 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.
HEMISPHERE FREIGHT SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HEMISPHERE FREIGHT SERVICES 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
We identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the freight services sector;
We focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, data protection, anti-bribery, employment, haulage operators licence, environmental and health and safety legislation;
We assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
Identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
Making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
Considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
HEMISPHERE FREIGHT SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HEMISPHERE FREIGHT SERVICES LIMITED
- 7 -
To address the risk of fraud through management bias and override of controls, we:
Performed analytical procedures to identify any unusual or unexpected relationships;
Tested journal entries to identify unusual transactions;
Reviewed the internal controls in place, specifically around payroll and bank transactions; and
Assessed whether judgements and assumptions made in determining the accounting estimates around job accruals and prepayments were indicative of potential bias.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
Agreeing financial statement disclosures to underlying supporting documentation;
Enquiring of management as to actual and potential litigation and claims; and
Reviewing correspondence with HMRC and the company's legal advisors.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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.
Shaun Roberts
Senior Statutory Auditor
For and on behalf of LB Group (Colchester)
1 February 2024
Chartered Accountants
Statutory Auditor
The Octagon Suite E2
2nd Floor Middleborough
Colchester
Essex
CO1 1TG
HEMISPHERE FREIGHT SERVICES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
53,031,386
68,050,546
Cost of sales
(38,789,567)
(55,070,996)
Gross profit
14,241,819
12,979,550
Administrative expenses
(12,627,760)
(10,954,318)
Other operating income
3,407
Operating profit
6
1,614,059
2,028,639
Interest payable and similar expenses
8
(65,387)
(59,437)
Profit before taxation
1,548,672
1,969,202
Tax on profit
9
(206,703)
(430,993)
Profit for the financial year
1,341,969
1,538,209
The income statement has been prepared on the basis that all operations are continuing operations.
HEMISPHERE FREIGHT SERVICES LIMITED
STATEMENT OF FINANCIAL POSITION
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
3,064,060
2,528,211
Current assets
Stocks
44,263
37,471
Debtors
12
8,454,542
12,164,564
Cash at bank and in hand
2,387,770
171,417
10,886,575
12,373,452
Creditors: amounts falling due within one year
13
(7,799,722)
(9,934,441)
Net current assets
3,086,853
2,439,011
Total assets less current liabilities
6,150,913
4,967,222
Creditors: amounts falling due after more than one year
14
(1,067,148)
(1,173,323)
Provisions for liabilities
Deferred tax liability
17
442,949
329,252
(442,949)
(329,252)
Net assets
4,640,816
3,464,647
Capital and reserves
Called up share capital
20
20,200
20,200
Profit and loss reserves
4,620,616
3,444,447
Total equity
4,640,816
3,464,647
The financial statements were approved by the board of directors and authorised for issue on 1 February 2024 and are signed on its behalf by:
Mr A Perrin
Director
Company Registration No. 02332841
HEMISPHERE FREIGHT SERVICES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 July 2021
20,200
2,072,038
2,092,238
Year ended 30 June 2022:
Profit and total comprehensive income for the year
-
1,538,209
1,538,209
Dividends
10
-
(165,800)
(165,800)
Balance at 30 June 2022
20,200
3,444,447
3,464,647
Year ended 30 June 2023:
Profit and total comprehensive income for the year
-
1,341,969
1,341,969
Dividends
10
-
(165,800)
(165,800)
Balance at 30 June 2023
20,200
4,620,616
4,640,816
HEMISPHERE FREIGHT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
- 11 -
1
Accounting policies
Company information
Hemisphere Freight Services Limited is a private company limited by shares incorporated in England and Wales. The registered office is Hemisphere House, 53-65 White House Road, Ipswich, Suffolk, UK, IP1 5PB.
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, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’ – Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Perrin Group Holdings Limited. These consolidated financial statements are available online from Companies House.
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 a period of at least twelve months from the date these financial statements are signed. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
The company has three distinct revenue streams of import, export and domestic sales as described below:
Revenue from export sales is recognised once the cargo sails the port in relation to sea freight and the date of transport in relation to air freight.
Revenue from import sales is recognised once the cargo is cleared by customs.
Revenue from domestic sales is recognised once the goods are despatched.
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.
HEMISPHERE FREIGHT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 12 -
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:
Improvements to leasehold property
10 to 20 years
Plant & machinery
20% to 50% Straight Line
Fixtures, fittings & equipment
15% to 30% Straight Line
Motor vehicles
16.67% to 25% Straight Line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
HEMISPHERE FREIGHT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 13 -
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
HEMISPHERE FREIGHT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 14 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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.
1.11
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 pension scheme for employees. The assets of the scheme are held separately from those of the company. The annual contributions payable are charged to the profit and loss account.
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 statement of financial position 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.
Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.
HEMISPHERE FREIGHT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
1
Accounting policies
(Continued)
- 15 -
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. 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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Job accruals
This relates to jobs which are yet to be invoiced. These costs are estimated by management based on the assumed total cost. Any job accrued for which does not clear within twelve months is written off.
3
Turnover
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Rendering of services
53,031,387
68,050,547
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
11,461,155
10,226,210
Overseas
41,570,232
57,824,337
53,031,387
68,050,547
HEMISPHERE FREIGHT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 16 -
4
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
16,000
13,150
For other services
Other assurance services
2,500
1,250
Taxation compliance services
1,150
550
3,650
1,800
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Number of distribution staff
55
27
Number of administrative staff
73
97
Number of management staff
20
6
Total
148
130
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
5,627,526
4,861,938
Social security costs
533,936
482,586
Pension costs
579,888
390,983
6,741,350
5,735,507
6
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
81,382
68,672
Depreciation of owned tangible fixed assets
253,073
241,373
Depreciation of tangible fixed assets held under finance leases
345,548
247,695
Profit on disposal of tangible fixed assets
(3,907)
-
Operating lease charges
848,564
752,072
HEMISPHERE FREIGHT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 17 -
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
423,400
388,100
Company pension contributions to defined contribution schemes
350,077
242,000
773,477
630,100
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
105,000
105,000
Company pension contributions to defined contribution schemes
88,847
58,800
8
Interest payable and similar expenses
2023
2022
£
£
Interest on finance leases and hire purchase contracts
65,387
59,437
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
72,318
277,886
Adjustments in respect of prior periods
20,688
(11,854)
Total current tax
93,006
266,032
Deferred tax
Origination and reversal of timing differences
113,697
164,961
Total tax charge
206,703
430,993
HEMISPHERE FREIGHT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
9
Taxation
(Continued)
- 18 -
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
1,548,672
1,969,202
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
294,248
374,148
Tax effect of expenses that are not deductible in determining taxable profit
3,894
2,052
Gains not taxable
(742)
Adjustments in respect of prior years
20,688
(11,854)
Effect of change in corporation tax rate
5,278
Permanent capital allowances in excess of depreciation
(230,360)
(98,314)
Deferred tax adjustment
113,697
164,961
Taxation charge for the year
206,703
430,993
10
Dividends
2023
2022
£
£
Final paid
165,800
165,800
HEMISPHERE FREIGHT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 19 -
11
Tangible fixed assets
Improvements to leasehold property
Plant & machinery
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 July 2022
1,540,557
1,532,343
552,746
1,061,306
4,686,952
Additions
59,947
180,443
383,268
518,238
1,141,896
Disposals
(32,407)
(32,407)
At 30 June 2023
1,600,504
1,712,786
936,014
1,547,137
5,796,441
Depreciation and impairment
At 1 July 2022
480,529
972,234
187,311
518,667
2,158,741
Depreciation charged in the year
94,286
196,862
77,231
230,242
598,621
Eliminated in respect of disposals
(24,981)
(24,981)
At 30 June 2023
574,815
1,169,096
264,542
723,928
2,732,381
Carrying amount
At 30 June 2023
1,025,689
543,690
671,472
823,209
3,064,060
At 30 June 2022
1,060,028
560,109
365,435
542,639
2,528,211
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
£
£
Plant & machinery
318,422
401,921
Fixtures, fittings & equipment
136,814
168,722
Motor vehicles
794,204
513,634
1,249,440
1,084,277
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
5,581,192
8,964,588
Amounts owed by group undertakings
2,002,502
1,575,656
Other debtors
163,893
216,225
Prepayments and accrued income
706,955
1,408,095
8,454,542
12,164,564
HEMISPHERE FREIGHT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 20 -
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
15
130,000
651,259
Obligations under finance leases
16
395,200
337,186
Trade creditors
6,261,270
7,792,295
Corporation tax
72,318
277,886
Other taxation and social security
147,461
154,243
Government grants
18
4,609
4,609
Other creditors
278,387
195,048
Accruals and deferred income
510,477
521,915
7,799,722
9,934,441
The company is subject to a debenture dated 19 July 2006 in favour of National Westminster plc. There exists a fixed and floating charge over the undertaking and all property and assets
Hire purchase and finance lease agreements are secured on the assets concerned.
14
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
15
292,500
442,000
Obligations under finance leases
16
719,341
671,407
Government grants
18
55,307
59,916
1,067,148
1,173,323
The company is subject to a debenture dated 19 July 2006 in favour of National Westminster plc. There exists a fixed and floating charge over the undertaking and all property and assets
Hire purchase and finance lease agreements are secured on the assets concerned.
15
Loans and overdrafts
2023
2022
£
£
Bank loans
422,500
552,500
Bank overdrafts
540,759
422,500
1,093,259
Payable within one year
130,000
651,259
Payable after one year
292,500
442,000
HEMISPHERE FREIGHT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 21 -
16
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
452,382
376,183
In two to five years
763,768
719,288
1,216,150
1,095,471
Less: future finance charges
(101,609)
(86,878)
1,114,541
1,008,593
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. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
17
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:
£
£
Accelerated capital allowances
442,949
329,252
2023
Movements in the year:
£
Liability at 1 July 2022
329,252
Charge to profit or loss
113,697
Liability at 30 June 2023
442,949
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.
HEMISPHERE FREIGHT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 22 -
18
Government grants
2023
2022
£
£
Arising from government grants
59,916
64,525
Included in the financial statements as follows:
Current liabilities
4,609
4,609
Non-current liabilities
55,307
59,916
59,916
64,525
The balance within deferred income relates to a grant received from Suffolk County Council in 2016 as a contribution towards capital expenditure in setting up a new site. The project was supported by New Anglia Local Enterprise Partnership through the Growing Business Fund.
The conditions of the grant stipulate that the jobs created must last at least one year and that any disposal of assets funded will require a repayment of part of the grant dependant on the date of disposal and proceeds received.
No issues have arisen to require any repayment to be made of this grant and the grant is being amortised over the life of the project.
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
579,888
390,983
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.
The number of directors to whom retirement benefits are accruing is 5 and the aggregate value of company contributions was £350,077 of which £88,847 related to the highest paid director.
HEMISPHERE FREIGHT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 23 -
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
'A' Ordinary shares of £1 each
20,100
20,100
20,200
20,200
'B' Ordinary shares of £1 each
100
100
-
-
The A Ordinary shares prescribe the right to attend and vote at any general meetings, receive dividends and participate in distribution on winding up of the company.
The B Ordinary shares do not entitle the holders to receive notice of or vote at any general meeting, on winding up of the company rights to repayment of capital is equal.
21
Financial commitments, guarantees and contingent liabilities
The company is subject to an unlimited intercompany guarantee and debenture dated 19 July 2006 in favour of National Westminster plc between the company, Hawk Express Limited and Perrin Group Holdings Limited.
At the balance sheet date the total liabilities secured amounted to £2,412,858 (2022: £2,576,671).
These amounts are not represented within the financial statements of the company but are included within the consolidated financial statements of the group.
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
557,688
559,728
Between two and five years
1,080,655
1,901,592
In over five years
29,250
1,638,343
2,490,570
23
Capital commitments
As at 30 June 2023 the company had contracted to purchase fixtures & fittings amounting to £1,399,000, of which a deposit of £349,750 was paid in June 2023.
24
Related party transactions
The company is subject to an unlimited intercompany guarantee and debenture dated 19 July 2006 in favour of National Westminster plc between the company, Hawk Express Limited and Perrin Group Holdings Limited.
HEMISPHERE FREIGHT SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
- 24 -
25
Ultimate controlling party
The parent company of Hemisphere Freight Services Limited is Perrin Group Holdings Limited.
The ultimate controlling party is Mr A Perrin who holds the majority of shares in the parent company.
The results of Hemisphere Freight Services Limited are consolidated within the group accounts of Perrin Group Holdings Limited. The registered office of Perrin Group Holdings Limited is Hemisphere House, 53-65 White House Road, Ipswich, Suffolk, England, IP1 5PB and the financial statements of the group are available through Companies House for public inspection.
2023-06-302022-07-01falseCCH SoftwareCCH Accounts Production 2023.300Mr A PerrinMr D NorrisMr D SaltMr L PerrinMr C PerrinMrs T Perrinfalse023328412022-07-012023-06-3002332841bus:Director12022-07-012023-06-3002332841bus:Director22022-07-012023-06-3002332841bus:Director32022-07-012023-06-3002332841bus:Director42022-07-012023-06-3002332841bus:Director52022-07-012023-06-3002332841bus:CompanySecretary12022-07-012023-06-3002332841bus:RegisteredOffice2022-07-012023-06-30023328412023-06-30023328412021-07-012022-06-3002332841core:RetainedEarningsAccumulatedLosses2021-07-012022-06-3002332841core:RetainedEarningsAccumulatedLosses2022-07-012023-06-30023328412022-06-3002332841core:LandBuildingscore:LeasedAssetsHeldAsLessee2023-06-3002332841core:PlantMachinery2023-06-3002332841core:FurnitureFittings2023-06-3002332841core:MotorVehicles2023-06-3002332841core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-06-3002332841core:PlantMachinery2022-06-3002332841core:FurnitureFittings2022-06-3002332841core:MotorVehicles2022-06-3002332841core:CurrentFinancialInstrumentscore:WithinOneYear2023-06-3002332841core:CurrentFinancialInstrumentscore:WithinOneYear2022-06-3002332841core:Non-currentFinancialInstrumentscore:AfterOneYear2023-06-3002332841core:Non-currentFinancialInstrumentscore:AfterOneYear2022-06-3002332841core:CurrentFinancialInstruments2023-06-3002332841core:CurrentFinancialInstruments2022-06-3002332841core:Non-currentFinancialInstruments2023-06-3002332841core:Non-currentFinancialInstruments2022-06-3002332841core:ShareCapital2023-06-3002332841core:ShareCapital2022-06-3002332841core:RetainedEarningsAccumulatedLosses2023-06-3002332841core:RetainedEarningsAccumulatedLosses2022-06-3002332841core:ShareCapital2021-06-3002332841core:RetainedEarningsAccumulatedLosses2021-06-3002332841core:LandBuildingscore:LongLeaseholdAssets2022-07-012023-06-3002332841core:PlantMachinery2022-07-012023-06-3002332841core:FurnitureFittings2022-07-012023-06-3002332841core:MotorVehicles2022-07-012023-06-3002332841core:UKTax2022-07-012023-06-3002332841core:UKTax2021-07-012022-06-300233284112022-07-012023-06-300233284112021-07-012022-06-300233284122022-07-012023-06-300233284122021-07-012022-06-3002332841core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-06-3002332841core:PlantMachinery2022-06-3002332841core:FurnitureFittings2022-06-3002332841core:MotorVehicles2022-06-30023328412022-06-3002332841core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-07-012023-06-3002332841core:WithinOneYear2023-06-3002332841core:WithinOneYear2022-06-3002332841core:BetweenTwoFiveYears2023-06-3002332841core:BetweenTwoFiveYears2022-06-3002332841core:MoreThanFiveYears2023-06-3002332841core:MoreThanFiveYears2022-06-3002332841bus:PrivateLimitedCompanyLtd2022-07-012023-06-3002332841bus:FRS1022022-07-012023-06-3002332841bus:Audited2022-07-012023-06-3002332841bus:FullAccounts2022-07-012023-06-30xbrli:purexbrli:sharesiso4217:GBP