FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
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CARGO MARKETING SERVICES LIMITED
COMPANY INFORMATION
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CARGO MARKETING SERVICES LIMITED
CONTENTS
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CARGO MARKETING SERVICES LIMITED
GROUP STRATEGIC REPORT
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
The directors present their Group Strategic Report for the 9 month period ended 31 December 2023.
The principal activity of the group and the company during the year was the provision of freight forwarding services.
Cargo Marketing Services continued to perform well for the 9 months of our Financial Year April 2023- December 2023.
Container shipping freight rate pricing has decreased dramatically during this period to pre-pandemic levels and this has had a natural domino effect on our tariff levels. Resulting in a reduced turnover value despite volumes remaining constant and consistent. Space on vessels has become more available which has resulted in a very aggressive industry with our all of our competitors fighting to hold onto and protect market share. This has inevitably put our margin levels under pressure, causing some erosion compared to recent years. The Company will continue to concentrate on maintaining volumes and operating at the highest level of customer service to keep ahead of a very keenly fought market. We will continue to look at expanding our choice of trade lanes with new services being introduced where beneficial, along with the expansion of our Airfreight product.
The Company is exposed to moderate levels of price risk, credit risk, liquidity risk and cash flow risk. The Company manages these by financing its operations through retained profits and its own cash reserves. The management objectives are to retain sufficient liquid funds to enable it to meet its day to day requirements, minimise the Group’s risk to fluctuating interest rates and foreign exchange movements. Trade debtors are managed by a strict credit control policy; agreed payment terms along with official credit limit checks.
The Company makes little use of financial instruments other than an operational bank account, so its exposure to the above risks are not really material for the assessment of the assets, liabilities, financial position and the profit of loss of the Company. Because of the Global economic uncertainty which has resulted in high inflation, high interest rates, increased energy costs, our labour costs have had to increase. Political issues worldwide, which are out of our control are also a concern in the current climate. ROE fluctuations have become more of a factor for the Company going forward also. Current procedures ensure that we do not hold large balances in foreign currency and this will be continued to be monitored regularly. However, because the Company can hold large cash balances from time to time, we are benefiting from higher interest rates on savings. The industry is becoming very competitive and the challenge for the Company will be to ensure we remain favourable and provide a value added service in order to retain our customer base but also add growth with new business. Also, customer liquidity continues to be a concern, but active monitoring and tighter credit control procedures will keep these risks to a minimum.
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CARGO MARKETING SERVICES LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
The performance indicators used by the group are primarily gross profit and turnover. However, we also pay particular attention to cash levels.
Group turnover decreased by 60.9% (31 March 2023: 24.9% increase) from £80,958,832 to £31,634,244 during the period Gross profit has decreased to £8,437,406 compared to £18,016,534 in the previous year. The group achieved a gross margin percentage this period of 26.7% compared to that of 22.4% in 31 March 2023. The group has reported negative operating cash flows of £1,917,307 (31 March 2023: £6,008,616 positive cash flow) and an overall decrease in cash of £5,363,891 (31 March 2023: £1,847,384 increase). The group continues to hold healthy cash reserves at the Balance Sheet date.
Cargo Marketing Services group also actively looks at customer retention and fall off levels along with respective volumes. There have been no major shifts up or down during this financial year.
This report was approved by the board and signed on its behalf.
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CARGO MARKETING SERVICES LIMITED
DIRECTORS' REPORT
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the 9 months ended 31 December 2023.
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the 9 months, after taxation, amounted to £3,241,227 ( 31 March 2023: £10,168,397).
The directors have prepared budgets forecasts covering a period of at least 12 months following the date of approval of the financial statements. The group has a net asset value at 31 December 2023 of £8,283,840 (31 March 2023: £7,909,586) and continues to hold healthy cash reserves.
The Directors have reviewed budgets and forecasts for a period of 12 months from approval of the financial statements. This is the first trading year to run from January to December. The first Quarter of FY 2024 has continued with decent profits although they are much lower than last year. This was expected and is not of any concern to the Directors at this time. The Company will continue to provide best customer service, coupled with increased activities in Sales & Marketing in order to promote and bring on new business to counteract this. The Global Shipping industry continues to face challenges that could put Global economies in danger. We have seen vessels being hijacked off the East African coast by Somalian Pirates and we have been affected by the heightened conflict in the Suez Canal. This has resulted in the re-routing of vessels around the Cape of Good Hope in South Africa adding another 2 weeks to many of the transit times into Europe. This has put keeping costs low or stable under pressure. We make every effort to keep our clients up to date and well informed of any delays which are out of our control and work very closely with our Carrier partners. Therefore, we are confident that our forecasts will be achieved, yet we will continue to seek ways to improve our operating systems to keep in line with an ever-changing industry. In summary, the Directors are of the opinion that there are adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
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CARGO MARKETING SERVICES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
The directors who served during the 9 months were:
Information as required by schedule 7 of the Large and Medium sized Companies and Groups (Accounts and Reports) Regulations 2008 has been included in the Group Strategic Report.
There are no post balance sheet events.
The auditors, Bishop Fleming LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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CARGO MARKETING SERVICES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CARGO MARKETING SERVICES LIMITED
We have audited the financial statements of Cargo Marketing Services Limited (the 'parent company') and its subsidiaries (the 'Group') for the 9 months ended 31 December 2023, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Company Statements of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated and Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
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 Group's or the 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 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 Auditors' 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.
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CARGO MARKETING SERVICES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CARGO MARKETING SERVICES LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial 9 months for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' 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 its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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CARGO MARKETING SERVICES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CARGO MARKETING SERVICES LIMITED (CONTINUED)
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 Auditors' 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 Group 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 procedures surrounding the identification and assessment of risks of material misstatement in relation to irregularities, including fraud and non-compliance with laws and regulations, included the following:
∙considering the nature of the entity and its environment, internal control environment, and business performance.
∙considering the results of our enquiries of management about their own identification and assessment of the risk of irregularities.
°obtaining and reviewing, for any matters identified, the Company’s documentation of their policies and procedures relating to:
°the identification, evaluation, and compliance with laws and regulations, and whether management were aware of any instances of non-compliance within the year
°the detection and response to the risk of fraud, and whether management have knowledge of actual, suspected, or alleged fraud; and
°the internal controls established to mitigate the risks of fraud or non-compliance with laws and regulations.
∙discussing amongst the audit engagement team, including internal tax specialists, regarding how and where fraud might occur in the financial statements and potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the completeness of revenue recognition and management override of controls. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to these identified risks.
We have obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act and tax legislation.
We considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the Company’s ability to operate or to avoid a material penalty. These included data protection regulations, health and safety regulations, and employment legislation.
Audit response to risks identified
Our procedures to respond to risks identified included the following:
∙reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements.
∙enquiring of management concerning actual and potential litigation claims.
∙performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement or fraud.
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CARGO MARKETING SERVICES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CARGO MARKETING SERVICES LIMITED (CONTINUED)
∙reading minutes of board meetings throughout the year.
∙in addressing the risk of fraud through management override of controls:
°testing the appropriateness of journal entries and other adjustments.
°assessing whether the judgements made in making accounting estimates are indicative of a potential bias.
°evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
This report is made solely to the company's members 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 Auditors' 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 for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditors
10 Temple Back
BS1 6FL
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CARGO MARKETING SERVICES LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
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CARGO MARKETING SERVICES LIMITED
REGISTERED NUMBER:01416708
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 16 to 34 form part of these financial statements.
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CARGO MARKETING SERVICES LIMITED
REGISTERED NUMBER:01416708
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 16 to 34 form part of these financial statements.
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CARGO MARKETING SERVICES LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
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CARGO MARKETING SERVICES LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
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CARGO MARKETING SERVICES LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
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CARGO MARKETING SERVICES LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
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CARGO MARKETING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
Cargo Marketing Services Limited is a company limited by shares, incorporated in England & Wales and domiciled in England.
The company's registered number is 01416708 and its registered office is Ocean House, Marston Park, Tamworth, Staffordshire, B78 3HU. The principal activity of the group and the company during the year was the provision of freight forwarding services.
2.ACCOUNTING POLICIES
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The functional and presentational currency for the company and the group is Sterling. the financial statements have been rounded to the nearest £1.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).
The company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the group and its own subsidiaries ("the group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
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CARGO MARKETING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
2.ACCOUNTING POLICIES (continued)
The directors have prepared budgets forecasts covering a period of at least 12 months following the date of approval of the financial statements. The group has a net asset value at 31 December 2023 of £8,283,840 (31 March 2023: £7,909,586) and continues to hold healthy cash reserves.
The Directors have reviewed budgets and forecasts for a period of 12 months from approval of the financial statement. The first Quarter of FY 2023-2024 has continued with healthy profits albeit at a much reduced level. However, the company continues to provide best customer service, coupled with increased activities in sales and marketing in order to promote and bring on new business. The global logistics industry continues to face extreme challenges, but our experience and knowledge allows us to operate well and efficiently to offer our clients the solutions they need. We continue to achieve healthy margins (slightly improved on last year) because of our loyalty and relationship with our carrier partners. We are confident that our forecasts will be achieved, yet we continue to seek ways to improve our operating systems to keep in line with an ever-changing industry.
Functional and presentation currency
Transactions and balances
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CARGO MARKETING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
2.ACCOUNTING POLICIES (continued)
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CARGO MARKETING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
2.ACCOUNTING POLICIES (continued)
GOODWILL
OTHER INTANGIBLE ASSETS
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
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CARGO MARKETING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
2.ACCOUNTING POLICIES (continued)
Land is not depreciated. Depreciation on other assets is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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CARGO MARKETING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
2.ACCOUNTING POLICIES (continued)
The group only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, loans from banks and other third parties and loans to related parties.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated Statement of Comprehensive Income. For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate under the contract. The nature of this business is that whilst estimates and judgements are required in certain areas, for example around prepayments and accruals, none are considered to be critical or key estimates.
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CARGO MARKETING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
The turnover and profit before tax are attributable to the one principal activity of the group.
Analysis of turnover by country of destination:
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CARGO MARKETING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
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CARGO MARKETING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
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CARGO MARKETING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
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CARGO MARKETING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
10.TAXATION (CONTINUED)
The Finance Act 2021 increased the main rate of corporation tax from 19% to 25% with effect from 1 April 2023.
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CARGO MARKETING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
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CARGO MARKETING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
13.TANGIBLE FIXED ASSETS (CONTINUED)
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CARGO MARKETING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
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CARGO MARKETING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
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CARGO MARKETING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
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CARGO MARKETING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
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CARGO MARKETING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
Share premium account
Capital redemption reserve
Profit and loss account
The group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the group to the fund and amounted to £179,509 (31 March 2023: £204,029). Contributions totalling £
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CARGO MARKETING SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 9 MONTHS ENDED 31 DECEMBER 2023
The group is controlled by MSL Corporate SL, who owns 100% of the issued share capital of the parent company, Cargo Marketing Services Limited. The principal address of MSL Corporate SL is C/SOL 139 - Poligono Industrial De Sedavi, Valencia, Spain.
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