Company registration number SC545847 (Scotland)
SONGA CREWMANAGEMENT LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
SONGA CREWMANAGEMENT LIMITED
COMPANY INFORMATION
Directors
A Blystad
K Macleod
KD Macleod
(Appointed 14 February 2023)
Company number
SC545847
Registered office
2 Marchfield Drive,  Paisley,  Renfrewshire
United Kingdom
PA3 2RB
Auditor
Azets Audit Services
Titanium 1
King's Inch Place
Renfrew
United Kingdom
PA4 8WF
SONGA CREWMANAGEMENT LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 22
SONGA CREWMANAGEMENT LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Review of the business

The company provides crew management services for ships. The majority of services are provided to related parties or fellow group undertakings. For the year to 31 December 2023, the company posted the following results:

 

 

2023

2022

2021

 

£

£

£

Revenue

40,179,463

33,476,339

29,106,646

Gross Profit

672,538

559,781

424,754

Profit before tax

269,495

295,294

92,313

 

Despite a reduction in the number of vessels under management, the level of profitability of the company increased from the prior year as a result of an increase in fee levels agreed with the vessels.

 

At the year end the company held net assets of £592,093 (2022 - £385,912).

Principal risks and uncertainties

The company is the in-house crew manager of the Blystad Group. As such, many of the risks of the business are aligned to the group.

 

The company considers the key risk to the business to be those resulting from the poor management of crew. However, the directors are conscious of this and endeavour every day to meet the demands and standards of the group and general responsibility in relation to good governance. As a result they consider the risk environment on a regular basis. As well as strategic, financial and operational matters, these also include issues concerning health & safety and compliance with applicable legal and regulatory requirements.

 

Financial risk

The group is exposed to various financial risks arising from its operations. The directors have policies in place to ensure such risks are managed.

 

The company is subject to foreign exchange risk through its operations with transactions principally in US$, which are managed closely with reference to rate movements. The company's credit risk is low as the majority of its operations are with related party or fellow group entities.

 

The company's financial risk management objectives are to ensure there is sufficient working capital and cash flow for the company to meet its operating needs and to ensure there is sufficient support for its strategy. This is achieved through careful management of our cash resources and by obtaining group support where necessary. The company has no external borrowings and is thus exposed to minimal interest rate risk. No Treasury transactions or derivatives are entered into.

 

The company has considered its risk in respect of its provision with regards to employer related obligations for social security and considers that it is virtually certain that all amounts required to settle the provision will be re-imbursed to it from group entities and its parent.

 

There are unprecedented challenges in the economy at present (for example significant inflationary pressures) as a result of the cumulative effect of Brexit, the pandemic and current geo-political matters. Such pressures may have an effect on future results.

SONGA CREWMANAGEMENT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

On behalf of the board

KD Macleod
Director
23 September 2024
SONGA CREWMANAGEMENT LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company continued to be that of crew management for ships.

Results and dividends

The results for the year are set out on page 9.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

A Blystad
K Macleod
KD Macleod
(Appointed 14 February 2023)
Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

 

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.

 

There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.

Future developments

Our strength lies in our loyal and dedicated sea and shore staff and we continue to work together to offer competent crew worldwide.

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 financial risks and their management.

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.

SONGA CREWMANAGEMENT LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
On behalf of the board
KD Macleod
Director
23 September 2024
SONGA CREWMANAGEMENT LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -

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:

 

 

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.

SONGA CREWMANAGEMENT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SONGA CREWMANAGEMENT LIMITED
- 6 -
Opinion

We have audited the financial statements of Songa Crewmanagement Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 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.

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 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:

SONGA CREWMANAGEMENT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SONGA CREWMANAGEMENT LIMITED
- 7 -
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:

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.

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.

SONGA CREWMANAGEMENT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SONGA CREWMANAGEMENT LIMITED
- 8 -

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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.

David Samborek
Senior Statutory Auditor
For and on behalf of Azets Audit Services
24 September 2024
Chartered Accountants
Statutory Auditor
Titanium 1
King's Inch Place
Renfrew
United Kingdom
PA4 8WF
SONGA CREWMANAGEMENT LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
40,179,463
33,476,339
Cost of sales
(39,506,625)
(32,916,558)
Gross profit
672,838
559,781
Administrative expenses
(519,290)
(356,296)
Other operating income
-
0
68,498
Operating profit
4
153,548
271,983
Interest receivable and similar income
6
115,947
23,311
Profit before taxation
269,495
295,294
Tax on profit
7
(63,314)
(56,182)
Profit for the financial year
206,181
239,112

The profit and loss account has been prepared on the basis that all operations are continuing operations.

SONGA CREWMANAGEMENT LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
£
£
Profit for the year
206,181
239,112
Other comprehensive income
-
-
Total comprehensive income for the year
206,181
239,112
SONGA CREWMANAGEMENT LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Current assets
Debtors
8
1,792,649
1,377,533
Cash at bank and in hand
1,296,180
2,178,165
3,088,829
3,555,698
Creditors: amounts falling due within one year
9
(958,611)
(1,855,247)
Net current assets
2,130,218
1,700,451
Provisions for liabilities
Provisions
10
1,538,125
1,314,539
(1,538,125)
(1,314,539)
Net assets
592,093
385,912
Capital and reserves
Called up share capital
11
1
1
Profit and loss reserves
592,092
385,911
Total equity
592,093
385,912
The financial statements were approved by the board of directors and authorised for issue on 23 September 2024 and are signed on its behalf by:
KD Macleod
Director
Company Registration No. SC545847
SONGA CREWMANAGEMENT LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
1
146,799
146,800
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
239,112
239,112
Balance at 31 December 2022
1
385,911
385,912
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
206,181
206,181
Balance at 31 December 2023
1
592,092
592,093
SONGA CREWMANAGEMENT LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
14
(885,316)
1,276,022
Income taxes paid
(112,616)
-
0
Net cash (outflow)/inflow from operating activities
(997,932)
1,276,022
Investing activities
Interest received
115,947
23,311
Net cash generated from investing activities
115,947
23,311
Net (decrease)/increase in cash and cash equivalents
(881,985)
1,299,333
Cash and cash equivalents at beginning of year
2,178,165
878,832
Cash and cash equivalents at end of year
1,296,180
2,178,165
SONGA CREWMANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
1
Accounting policies
Company information

Songa Crewmanagement Limited is a private company limited by shares incorporated in Scotland. The registered office is 2 Marchfield Drive, Paisley, Renfrewshire, United Kingdom, PA3 2RB.

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. Monetary amounts in these financial statements are rounded to the nearest £. The functional currency of the company is US Dollars.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

Ttruehe directors are required to prepare the statutory financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. In satisfaction of this responsibility the directors have considered the company's ability to meet its liabilities as they fall due.

 

The company has obtained assurances from group entities and its parent company that they will re-imburse the company for any outflow of economic benefits required to settle its provision for historic and current employer related obligations. This includes any shortfall arising should vessels be sold outside of the group structure and the liability be higher than estimated.

 

The directors are satisfied themselves as to the validity of these assurances and that the entities have the means and authority to provide such funding if it is required.

 

Taking the above into account, along with the fact that the company continues to be cash generative, the directors consider that it is appropriate to prepare the financial statements on the going concern basis.

1.3
Turnover

Revenue relates to the provision of crew management services. Services are performed over the period of the contract to which they relate.

 

Revenue is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

1.4
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.

SONGA CREWMANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.5
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

SONGA CREWMANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.6
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.

1.7
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

SONGA CREWMANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.8
Provisions

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.9
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.

1.10
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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Principal employer

The company considers that it is the employer of principal with regards to the crew provided to the vessels. As such, all wages and salaries and other crew related costs are included within Cost of Sales and the recharges to the vessels included within Revenue.

SONGA CREWMANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 18 -
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.

Employer related obligations

The company acts as seafaring crew manager for vessel owning companies. The company employs EU seafaring employees and consequently is responsible for the legal administration and payment of all employer related obligations including legislative requirements relevant to seafarer residency.

 

The company has calculated a provision in respect of historic and current employer related obligations relevant to the residency of its employees based on various professional, legal and tax related advice. In determining the value of the provision, the company’s directors have exercised judgement in respect of the following areas:

 

The provision represents the Directors best estimate including the risks and uncertainties of the expenditure required to settle the obligations based on the information available and advice received. However, should certain of the assumptions above prove to be inaccurate, the amounts required to settle obligations could be materially higher. Changes in estimates are recognised prospectively in the year the change is made.

 

Nevertheless, under its crew management agreement, all costs associated with crew employment are recharged to the vessel owning companies.

 

As such, any provision is met by an equivalent debtor for the amounts which would be due back from the vessel owning companies to pay any liabilities arising. The company has obtained letters of comfort from group companies confirming this and from its parent entity in respect of any shortfall arising should vessels be sold outside of the group structure and the liability be higher than estimated. In the opinion of the directors, it is virtually certain that all amounts required to settle the provision will be re-imbursed to it.

 

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Management fees
672,839
556,064
Recharged crew costs
39,506,624
32,920,275
40,179,463
33,476,339
2023
2022
£
£
Other revenue
Interest income
115,947
23,311
SONGA CREWMANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
35,893
(15,937)
Fees payable to the company's auditor for the audit of the company's financial statements
19,425
18,500
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Vessel Crew
841
731

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
33,025,442
27,789,353
Social security costs
1,735,180
1,725,796
34,760,622
29,515,149
6
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
115,947
23,311
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
115,947
23,311
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
63,314
56,182
SONGA CREWMANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Taxation
(Continued)
- 20 -

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
269,495
295,294
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
63,385
56,106
Tax effect of expenses that are not deductible in determining taxable profit
1,404
76
Tax effect of income not taxable in determining taxable profit
(1,475)
-
0
Taxation charge for the year
63,314
56,182
8
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
3,273
46,703
Other debtors
1,789,376
1,330,830
1,792,649
1,377,533
9
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
51,929
24,449
Amounts owed to group undertakings
219,323
325,317
Corporation tax
24,419
73,721
Other taxation and social security
5,746
91,677
Other creditors
430,425
1,159,299
Accruals and deferred income
226,769
180,784
958,611
1,855,247
10
Provisions for liabilities
2023
2022
£
£
Provisions
1,538,125
1,314,539
SONGA CREWMANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Provisions for liabilities
(Continued)
- 21 -
Movements on provisions:
Provisions
£
At 1 January 2023
1,314,539
Additional provisions in the year
223,586
At 31 December 2023
1,538,125

As detailed in note 2 to the financial statements, the provision relates to potential employment related costs based on the residency of the seafarer. The equivalent debtor due back from the vessel owning companies to re-imburse the company is included within Other debtors in note 8.

 

11
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1
1
1
1
12
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Management fees and recharged crew costs
Recharged expenses
2023
2022
2023
2022
£
£
£
£
Entities with control, joint control or significant influence over the company
6,962,107
1,075,850
(413,116)
(314,633)
Other related parties
4,751,118
5,583,263
-
-
2023
2022
Amounts due to related parties
£
£
Other related parties
(60,273)
(73,234)
Other information

The company has taken exemption from disclosing related party transactions with entities that are 100% subsidiaries with the group.

SONGA CREWMANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
13
Ultimate controlling party

The ultimate parent company, which is the largest group preparing consolidated accounts which include the company, is Blystad AS, a company incorporated in Norway, Copies of the group financial statements of Blystad AS can be obtained from its registered office at Haakon V11's Gate 1, PO Box 1468, Vika, 0116 Oslo, Norway.

 

The intermediate parent company, which is the smallest preparing consolidated accounts which include Songa Crewmanagement Limited and its immediate parent Songa Shipmanagement Limited, is Songa Tankers AS, a company incorporated in Norway. Copies of the group financial statements can be obtained from its registered office at Haakon V11's Gate, PO Box 1468, VIka, 0116, Oslo, Norway.

14
Cash (absorbed by)/generated from operations
2023
2022
£
£
Profit for the year after tax
206,181
239,112
Adjustments for:
Taxation charged
63,314
56,182
Investment income
(115,947)
(23,311)
Increase in provisions
223,586
258,820
Movements in working capital:
Increase in debtors
(415,116)
(167,530)
(Decrease)/increase in creditors
(847,334)
912,749
Cash (absorbed by)/generated from operations
(885,316)
1,276,022
15
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
2,178,165
(881,985)
1,296,180
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