The director presents the strategic report for the year ended 30 June 2023.
The Directors aim to provide a balanced and comprehensive review of the development and performance of the business during the year and its position at the year end.
During the year the group turnover has decreased by 21% (2022: increase 62%) and achieved a gross profit margin of 26.6% (2022: 19.1%).
The main risk to the group continues to be the general condition of the economy but the directors are confident that the group is well placed to deal with any issues as they arise, given the increased strength of the group's balance sheet.
The company's aim is to achieve growth in terms of market share and profitability in future years.
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.
The group had traded extremely well in the year considering the challenges that the economy has presented, shown by a continuing increase in turnover.
Brexit has created many obstacles to overcome but the group was well prepared and has been able to guide customers through the process which has helped to strengthen our relationships and open up more opportunities.
As a group we are currently preparing to open a new multi-million-pound warehouse in Suffolk which will enable expansion of our warehousing services in 2024. This will enable us to provide 34,750 racked pallet locations, which stack nine levels high, and an additional 8,000 bulk loaded pallets on floors and mezzanines.
Post balance sheet events
On 27 November 2023, Hemisphere Freight Services purchased the warehousing and freight forwarding elements of Magnus Group, including the associated operations staff, after the company announced that they were intending to appoint administrators. Our team will utilise the warehousing space available as part of this purchase for six months in the build up to our new site opening.
During the year, the Directors have acted to promote the success of the Company for the benefit of its members as a whole.
Throughout the year, while discharging their duties, section 172 requires a Director to have regard to, among other matters, the;
■ Likely long-term consequences of any decisions made
■ Interests of the Company’s employees
■ Business relationships with suppliers and customers
■ Impact on the community and environment of the company's operations
■ Reputation for high standards of business conduct and
■ Need to act fairly between members of the company
The Directors act in good faith, to promote the success of the company for the benefit of its members as a whole.
Key to our Company’s success is the dedication of our team and in this regard their development and well-being is fundamental.
Our HR Manager, Department Heads and Members of our Senior Management Teams continually monitor and communicate on our ever evolving policies and procedures. Our training and educational programs are continuous and these are not purely vocational in terms of our service offerings, but also geared towards the well-being of our team and as one example of this, we have had team members trained beyond general first aid to also become Mental Health First Aiders, which is something as a Company we feel a responsibility to not only provide, but also to enhance and evolve as we grow as a business.
Providing Team members with not only official channels of communication with Management but also access to their qualified peers is important as indeed is having an open door policy throughout our organization and providing opportunities through annual one to one appraisals for Team Members to discuss their employment and development as required.
As and when new opportunities arise and new positions are created, generally these are where possible always advertised internally, providing everyone with an opportunity to consider and apply and the process for considering such applications is we believe very fair and inclusive and in all cases, applicants are provided with feedback whether successful or not. In the case of the latter, the idea is to ensure that our Team are not discouraged from putting themselves forward for any and all opportunities presented, even if they may not have been successful previously.
Communication is paramount in all cases as indeed is keeping our team appraised and in this regard, we not only send out a general update in December, but also our fiscal year end in June and in between times we communicate regularly with any adhoc news which is worthy of an announcement and of course our Team have access to Company social medial posts as well as news via our company website. We also stage and host regular social gatherings for our Team as well as encouraging and supporting our Team in participating in events or taking on challenges in aid of charitable causes. All in all we strive to be a well-rounded employer who invests in our Team both within the workplace as well as beyond, always striving to enrich our Team members experiences as best we can.
The relationship we enjoy with our Team spills over to the experience that our clients and suppliers receive in terms of customer service and often we are complimented on the fact that irrespective of circumstance when dealing with our Company, they are always greeted with a very positive and professional attitude. Irrespective of whether a client, supplier or associate, we take pride in conducting ourselves with the utmost honesty and integrity.
Our company continues to support local good causes, yours truly is a long standing patron of one such local charity Inspire Suffolk, we also as previously mentioned encourage and support our Team members to take part in challenges often fund raising for local and national good causes and we also support clients, suppliers and other associates who do similar.
We also take our environmental policies seriously, our new warehouse facility coming on stream in Q1 2024 will be as close to carbon neutral as is possible both in terms of structure and equipment utilization. We are also installing Solar at our White House Road HQ site and further evaluating and where possible enhancing all of our sites green credentials.
As a closing summary, we have great confidence in our abilities to provide our growing client base with unparalleled service in our 34 year history, during this time we have dealt with instability in financial markets, global financial crashes, UK and global recessions of varying magnitudes, Brexit and Covid in combination and having ridden all storms, we have adapted and been resilient throughout.
Our business is growing year on year, we are extremely pro-active in the development of our systems, processes and service offerings, our staff retention and our ability to attract new staff is second to none, in the main due to our industry wide reputation and in particular a strong ethos towards staff wellbeing, training and progression. As a consequence our entire team is extremely loyal, dedicated and enthusiastic and with continued investment not only in our team, but also our infrastructure and resource, we are well placed and able to push our business forwards positively.
On behalf of the board
The director presents his annual report and financial statements for the year ended 30 June 2023.
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £295,000. The director does not recommend payment of a further dividend.
The director who held office during the year and up to the date of signature of the financial statements was as follows:
The auditor, LB Group (Colchester), is deemed to be reappointed under section 487(2) of the Companies Act 2006.
No individual companies within the group are classified as large companies and therefore the group are not required to report on its emissions, energy consumption or energy efficiency activities.
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.
We have audited the financial statements of Perrin Group Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 June 2023 which comprise the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group 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).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 director's 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 group's and parent 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 director with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is 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 director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is responsible for assessing the parent 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 director either intends to liquidate the parent company or to cease operations, or has no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
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 & property holding company sectors;
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.
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, prepayments and property valuation 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.
Use of our 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.
The income statement has been prepared on the basis that all operations are continuing operations.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £229,645 (2022 - £352,419 profit).
Perrin Group Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Hemisphere House, 53-65 White House Road, Ipswich, Suffolk, UK, IP1 5PB.
The group consists of Perrin Group Holdings Limited and all of its subsidiaries.
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.
The 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 for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Perrin Group Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 30 June 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
At the time of approving the financial statements, the director has no concerns over the groups ability to continue trading for at least 12 months from the date of signing the financial statements. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
Turnover represents amounts receivable for goods and services net of VAT and trade discounts.
Revenue is recognised once the company fulfils their obligations to the customer in respect of the transit.
Hemisphere Freight Services Limited, a member of the group, operates three broad streams of revenue by way of export, import and domestic freight handling operations. The company also earns revenue from warehousing operation.
Export revenue is recognised at the point of departure for both sea and air freight.
Import revenue is recognised when the consignment clears the customs point at the port of arrival for both sea and air freight.
Domestic revenue and warehousing revenue are recognised once the consignment is dispatched to the consignee or upon actual delivery based on terms agreed with customers.
Freehold land and assets in the course of construction are not depreciated.
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 recognised in the income statement.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.
The group 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 group's statement of financial position when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, 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, 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.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
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 group after deducting all of its 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.
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.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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 leased asset are consumed.
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.
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.
When translating the financial statements of a foreign subsidiary the statement of financial position is translated at the rates prevailing on the reporting end date. The income statement is translated using the average rate for the year with any differences arising on exchange recognised as other comprehensive income in a non-distributable other reserve.
In the application of the group’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
The investment property has been valued based off a professional third party recommendation. This involves significant judgement based off market rates and is reviewed by the directors each year.
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.
An analysis of the group's turnover is as follows:
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
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:
In addition to the amount charged to the income statement, the following amounts relating to tax have been recognised directly in other comprehensive income:
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
The impairment losses in respect of financial assets are recognised in other gains and losses in the income statement.
More information on impairment movements in the year is given in note 10.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
If revalued assets were stated on an historical cost basis rather than a fair value basis, the total amounts included would have been as follows:
Details of the company's subsidiaries at 30 June 2023 are as follows:
Details of associates at 30 June 2023 are as follows:
Each share is entitled to all rights attached with full voting and equity rights.
The year end of Integer Micro Systems Limited is 30 September.
Details of joint ventures at 30 June 2023 are as follows:
Hire purchase and finance lease agreements are secured on the asset concerned.
The company is subject to an unlimited intercompany guarantee and debenture dated 19 July 2006 in favour of National Westminster plc between the company, Hemisphere Freight Services Limited and Hawk Express Limited.
There is also a fixed charge over the company's premises dated 24 July 2014 in favour of National Westminster Bank plc in relation to the mortgage of the property.
At the balance sheet date the total liabilities secured amounted to £2,682,005 (2022: £2,764,704).
Finance lease payments represent rentals payable by the group 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.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax liability in respect of revaluations is expected to reverse at the earliest of the useful life of the asset or at the point of sales.
The deferred tax liability in respect of accelerated capital allowances will reverse each year in line with the useful life of the asset, recognised in the profit or loss.
There were no deferred tax movements in the company during the year.
Deferred income is included in the financial statements as follows:
The balance within deferred income relates entirely to a grant received from Suffolk County Council 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
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The number of directors to whom retirement benefits are accruing is 4 and the aggregate value of company contributions was £66,524 of which £34,586 related to the highest paid director.
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.
The share premium reserve contains the premium arising on issue of equity shares, net of issue expenses.
The revaluation reserve includes the total surplus on revaluation of tangible fixed assets less any associated deferred tax provision.
The other reserve includes all differences arising on translation of the foreign subsidiary. These are non-distributable reserves.
The profit and loss reserve includes all current and prior retained period profits and losses.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
As at 30 June 2023, the group had contracted to purchase fixtures & fittings amounting to £1,399,000.
The remuneration of key management personnel is as follows.
Dividends totalling £295,000 (2022 - £165,800) were paid in the year in respect of shares held by the company's directors.