Company registration number 01613385 (England and Wales)
GEORGE BAKER (SHIPPING) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
GEORGE BAKER (SHIPPING) LIMITED
COMPANY INFORMATION
Directors
D. Baker
S. Binns
J. Goulden
(Appointed 18 April 2023)
Mr M A Ling
(Appointed 6 May 2024)
Mr G C Pearce
Mr D J M Toal
Mr K Beamish
(Appointed 6 May 2024)
Mr M D Sharpe
(Appointed 6 May 2024)
Company number
01613385
Registered office
Felixstowe Mega Distribution Centre
Clickett Hill Road
Felixstowe
IP11 4BA
Auditor
BG Audit LLP
Statutory Auditors
7 Three Rivers Business Park
Felixstowe Road, Foxhall
IPSWICH
IP10 0BF
GEORGE BAKER (SHIPPING) LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of total comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 23
GEORGE BAKER (SHIPPING) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the period ended 31 December 2023.
Fair review of the business
The company’s core activity continues to be the provision of specialist Customs Brokerage and related services. The company operates within the George Baker group of companies and its primary aim is to facilitate delivery of the group’s strategic goals and to achieve sustainable and profitable growth.
During the year, the group undertook a significant reorganisation with the transfer of the trades of three of its subsidiaries, into the company. The purpose of the reorganisation was to drive efficiencies and synergies across the enlarged business, the aim being to provide a strongly cohesive service for clients.
The company prides itself on delivering the highest service levels across a comprehensive range of services and by continuously evolving, has introduced new and industry leading solutions to trading businesses around the world.
The directors consider that the company has performed strongly during the financial year, despite the background of instability in the logistics industry and the wider economy. Continued control of margins and costs is expected to further strengthen the company’s ongoing performance. The customer base has increased during the year and customer retention has remained strong, with no major reliance on any individual customers.
The company is committed to conducting its activities in a manner that protects the health and safety of all personnel working under its direction. All quality accreditations have been retained.
Principal risks and uncertainties
Economic risk
The main risks facing the company derive from cyclical fluctuations in the freight and shipping markets and general economic conditions, which have an effect on the underlying business of the customer base.
Credit risk
Credit checks are carried out on all potential customers before sales are made and on all existing customers on a cyclical basis. Credit risk in relation to each customer relationship, is individually assessed, monitored and modified as necessary, during the reporting period.
Liquidity Risk
The company manages liquidity risk by monitoring the position on liquid asset balances on a daily basis and by actively managing available funds, to ensure that cash reserves are sufficient in the short-term to meet the company’s financial obligations as they fall due and to ensure that funds are available to support the company’s operations and growth ambitions.
Foreign currency risk
The company is not materially exposed to foreign currency fluctuations however, some risk is inevitable given the modest volume of foreign currency transactions undertaken during the course of the period.
Development and performance
The company continues to offer a wide range of transport and logistics solutions to clients in both the UK and internationally. The company continues to benefit from strong client retention and this has enabled the company to secure and build on the growth achieved in recent years. Maintaining stability during the current economic turbulence is the overriding priority, whilst also investing in its commercial team in the immediate future.
The directors are pleased with the results of the company. The company’s business volumes developed satisfactorily during the year. The profit for the financial year, after taxation, amounted to £2,427k (period ended December 2022: £1,556k).
Key performance indicators
The company uses bespoke key performance indicators to monitor and measure profit centre performance and uses contribution margin and earnings before tax to evaluate overall performance.
GEORGE BAKER (SHIPPING) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Position of the business at the year end
The financial position at the year end is strong, there were no bank borrowings and the company has sufficient cash reserves to enable it to meet its obligations as they fall due.
At the financial year end, the company’s reserves were £5,414k (period ended December 2022: £4,987k) and the company had net assets of £5,420k (period ended December 2022: £4,993k).
D. Baker
Director
24 September 2024
GEORGE BAKER (SHIPPING) 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 the provision of shipping related services, based at the container port of Felixstowe, as follows:
- Customs clearance services, both import and export, at all major UK sea ports
- Container packing/unpacking and bonded warehousing
- UK container transportation and European trucking
- Distribution of warehoused products
Directors
The directors who held office during the Year and up to the date of signature of the financial statements were as follows:
D. Baker
S. Binns
J. Goulden
(Appointed 18 April 2023)
Mr M A Ling
(Appointed 6 May 2024)
Mr G C Pearce
Mr D J M Toal
Mr K Beamish
(Appointed 6 May 2024)
Mr M D Sharpe
(Appointed 6 May 2024)
Results and dividends
The results for the Year are set out on page 8.
Ordinary dividends were paid amounting to £2,000,000. The directors do not recommend payment of a final dividend.
Auditor
The auditor, BG Audit LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
D. Baker
Director
24 September 2024
GEORGE BAKER (SHIPPING) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
GEORGE BAKER (SHIPPING) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GEORGE BAKER (SHIPPING) LIMITED
- 5 -
Opinion
We have audited the financial statements of George Baker (Shipping) Limited (the 'company') for the Year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the Year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial Year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
GEORGE BAKER (SHIPPING) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GEORGE BAKER (SHIPPING) LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Company and industry, we identified that the principal risks of non-compliance with laws and regulations related to operating licence requirements relating to it's transport business, and considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that impact directly on the preparation of the financial statements including the Companies Act, and UK tax legislation.
We considered managements incentives and opportunities for fraudulent adjustments to the financial statements including override of controls and determined that the principal risks were related to inappropriate journal entries or fraudulent transactions that would result in the manipulation of profits.
Audit procedures included:
Making enquiries of management for known or suspected instances of fraud or non-compliance with laws and regulations.
Consideration of management’s procedures for detecting and preventing fraud, including controls.
Reviewing journal entries to identify material or unusual transactions
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
GEORGE BAKER (SHIPPING) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GEORGE BAKER (SHIPPING) LIMITED
- 7 -
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Jonathan Oakley F.C.A. (Senior Statutory Auditor)
For and on behalf of BG Audit LLP
24 September 2024
Statutory Auditor
7 Three Rivers Business Park
Felixstowe Road, Foxhall
IPSWICH
IP10 0BF
GEORGE BAKER (SHIPPING) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
Year ended
11 months to
31 December
31 December
2023
2022
Notes
£
£
Turnover
3
30,071,655
22,779,620
Cost of sales
(20,590,955)
(17,465,059)
Gross profit
9,480,700
5,314,561
Administrative expenses
(6,260,608)
(3,664,034)
Other operating income
25,820
208,148
Operating profit
4
3,245,912
1,858,675
Interest payable and similar expenses
8
(48,208)
(3,353)
Profit before taxation
3,197,704
1,855,322
Tax on profit
9
(770,781)
(299,553)
Profit for the financial Year
2,426,923
1,555,769
The profit and loss account has been prepared on the basis that all operations are continuing operations.
GEORGE BAKER (SHIPPING) LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 9 -
31 December
31 December
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
2,268,318
97,481
Current assets
Stocks
12
14,161
-
Debtors
13
4,934,767
3,662,406
Cash at bank and in hand
5,829,437
5,286,670
10,778,365
8,949,076
Creditors: amounts falling due within one year
14
(6,372,283)
(4,029,809)
Net current assets
4,406,082
4,919,267
Total assets less current liabilities
6,674,400
5,016,748
Creditors: amounts falling due after more than one year
15
(700,752)
Provisions for liabilities
17 and 18
(553,374)
(23,397)
Net assets
5,420,274
4,993,351
Capital and reserves
Called up share capital
20
6,750
6,750
Profit and loss reserves
5,413,524
4,986,601
Total equity
5,420,274
4,993,351
The financial statements were approved by the board of directors and authorised for issue on 24 September 2024 and are signed on its behalf by:
D. Baker
Director
Company Registration No. 01613385
GEORGE BAKER (SHIPPING) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 February 2022
6,750
3,680,832
3,687,582
Period ended 31 December 2022:
Profit and total comprehensive income for the period
-
1,555,769
1,555,769
Dividends
10
-
(250,000)
(250,000)
Balance at 31 December 2022
6,750
4,986,601
4,993,351
Period ended 31 December 2023:
Profit and total comprehensive income for the period
-
2,426,923
2,426,923
Dividends
10
-
(2,000,000)
(2,000,000)
Balance at 31 December 2023
6,750
5,413,524
5,420,274
GEORGE BAKER (SHIPPING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information
George Baker (Shipping) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Felixstowe Mega Distribution Centre, Clickett Hill Road, Felixstowe, IP11 4BA. The company number is 01613385.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 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 financial statements of the company are consolidated in the financial statements of George Baker Group Limited. These consolidated financial statements are available from Companies House.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Reporting period
These financial statements are for a twelve month period. The comparative is for a eleven month period as the accounting period was shortened to be in line with other group companies.
1.4
Turnover
Turnover represents amounts receivable for services net of VAT and trade discounts. Turnover is recognised in the period in which services are provided.
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
GEORGE BAKER (SHIPPING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Warehouse Equipment
10% Straight line
Fixtures, fittings and equipment
33% - 10% Straight line
Motor vehicles
25% Straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
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.
1.9
Financial instruments
GEORGE BAKER (SHIPPING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
GEORGE BAKER (SHIPPING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
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.
1.11
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
1.12
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.
GEORGE BAKER (SHIPPING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.13
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.
1.14
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.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.17
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.
GEORGE BAKER (SHIPPING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
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.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Shipping services
30,071,655
22,779,620
2023
2022
£
£
Other significant revenue
Other Grant income
15,602
The whole of the turnover is attributable to the company’s principal activities.
All turnover arose based on sales orders received in the United Kingdom. The Directors consider that disclosure of geographical markets would be prejudicial to the company’s interests and therefore this has not been given.
4
Operating profit
2023
2022
Operating profit for the period is stated after charging/(crediting):
£
£
Exchange losses/(gains)
63,777
26,419
Fees payable to the company's auditors for the audit of the company's financial statements
12,795
11,880
Depreciation of owned tangible fixed assets
593,299
81,784
Loss on disposal of tangible fixed assets
18,123
104
Operating lease charges
199,725
86,887
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
12,795
11,880
GEORGE BAKER (SHIPPING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the Year was:
2023
2022
Number
Number
Admin and Sales
96
45
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
4,390,207
1,624,405
Social security costs
477,227
164,928
Pension costs
121,273
47,763
4,988,707
1,837,096
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
527,226
346,652
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
141,675
109,258
8
Interest payable and similar expenses
2023
2022
£
£
Interest on finance leases and hire purchase contracts
36,083
-
Other interest
12,125
3,353
48,208
3,353
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
618,125
291,923
GEORGE BAKER (SHIPPING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
2023
2022
£
£
(Continued)
- 18 -
Deferred tax
Origination and reversal of timing differences
152,656
7,630
Total tax charge
770,781
299,553
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
3,197,704
1,855,322
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
752,100
352,511
Tax effect of expenses that are not deductible in determining taxable profit
11,383
2,431
Effect of change in corporation tax rate
9,037
5,615
Group relief
(64,287)
Depreciation on assets not qualifying for tax allowances
6,038
Other permanent differences
2,886
Enhanced capital allowances
(3,816)
(5,641)
Group reconstruction adjustment
2,077
Taxation charge for the period
770,781
299,553
10
Dividends
2023
2022
£
£
Dividends paid
2,000,000
250,000
GEORGE BAKER (SHIPPING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
11
Tangible fixed assets
Warehouse Equipment
Fixtures, fittings and equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
19,074
140,900
159,974
Additions
2,200
40,355
1,421,589
1,464,144
Additons from group reconstruction
48,387
1,974,371
2,022,758
Disposals
(19,075)
(32,471)
(51,546)
At 31 December 2023
2,199
197,171
3,395,960
3,595,330
Depreciation and impairment
At 1 January 2023
956
61,537
62,493
Depreciation charged in the Year
1,327
61,739
530,233
593,299
Eliminated in respect of disposals
(2,225)
(31,198)
(33,423)
Depreciation transferred from group reconstruction
28,349
676,294
704,643
At 31 December 2023
58
120,427
1,206,527
1,327,012
Carrying amount
At 31 December 2023
2,141
76,744
2,189,433
2,268,318
At 31 December 2022
18,118
79,363
97,481
12
Stocks
2023
2022
£
£
Raw materials and consumables
14,161
-
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
4,116,925
1,985,683
Amounts owed by group undertakings
206,491
1,005,319
Other debtors
391,602
401,330
Prepayments and accrued income
219,749
270,074
4,934,767
3,662,406
GEORGE BAKER (SHIPPING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
16
461,510
Trade creditors
4,180,172
3,116,901
Amounts owed to group undertakings
155,531
303,747
Corporation tax
618,125
291,923
Other taxation and social security
125,093
45,724
Other creditors
69,542
14,470
Accruals and deferred income
762,310
257,044
6,372,283
4,029,809
Net obligations of £461,510 under hire purchase contracts are secured on the assets concerned.
15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
16
700,752
Net obligations of £700,752 under hire purchase contracts are secured on the assets concerned.
16
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
461,510
In two to five years
700,752
1,162,262
Finance lease payments represent rentals payable by the company or 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 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
17
Provisions for liabilities
2023
2022
£
£
Provision for legal fees
50,000
-
GEORGE BAKER (SHIPPING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
17
Provisions for liabilities
(Continued)
- 21 -
Movements on provisions:
Provision for legal fees
£
Additional provisions in the year
50,000
18
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2023
2022
Balances:
£
£
ACAs
515,874
23,397
Other timing differences
(12,500)
-
503,374
23,397
2023
Movements in the Year:
£
Liability at 1 January 2023
23,397
Charge to profit or loss
152,656
Other
327,321
Liability at 31 December 2023
503,374
The net deferred tax liability expected to reverse in the year ended 31st December 2024 is £190,986. This primarily relates to the reversal of timing differences on acquired tangible assets and capital allowances through depreciation, offset by expected tax deductions when payments are made to utilise provisions.
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
121,273
47,763
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
GEORGE BAKER (SHIPPING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
6,750
6,750
6,750
6,750
There is a single class of ordinary shares issued. There are no restrictions on the distribution of dividends and the repayment of capital.
21
Financial commitments, guarantees and contingent liabilities
The bank has made guarantees on behalf of the company to Customs Comprehensive Guarantee Team to £487,000.
22
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
8,728
13,573
Between two and five years
4,076
12,804
12,804
26,377
23
Related party transactions
Transactions with related parties
During the Year the company entered into the following transactions with related parties:
Sales
Purchases
2023
2022
2023
2022
£
£
£
£
Entities with control, joint control or significant influence over the company
374,220
737
802,922
578,171
Fellow subsidiary companies
-
313,188
-
5,106,622
Rent, rates and service charges
2023
2022
£
£
Entities with control, joint control or significant influence over the company
170,816
150,328
GEORGE BAKER (SHIPPING) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
23
Related party transactions
(Continued)
- 23 -
2023
2022
Amounts owed to related parties
£
£
Entities with control, joint control or significant influence over the company
69,297
114,822
Fellow subsidiary companies
-
303,747
The company has taken advantage of the exemptions conferred by FRS102 not to make disclosures concerning companies wholly owned within the group.
24
Directors' transactions
During the year a repayment of £12,000 was made by a director. At the year end a director owed £nil to the company (2022: £12,000).
25
Ultimate controlling party
The company is a 100% subsidiary of George Baker Group Limited, a company incorporated in the United Kingdom. The registered office is Felixstowe Mega Distribution Centre, Clickett Hill Road, Felixstowe, Suffolk, IP11 4BA and group accounts are available from this address.
26
Group reconstruction
During the year a group reconstruction resulted in the transfer of the trade and assets and liabilities of fellow subsidiaries to George Baker (Shipping) Limited as follows:
George Baker (Air & Sea) Limited transferred on 1 January 2023
George Baker (Transport) Limited transferred on 1 February 2023
George Baker (Europe) Limited transferred on 1 March 2023
The assets and liabilities were transferred at book value under merger accounting rules. The profit and loss account for the year ended 31st December 2023 includes the results of the fellow subsidiaries from the date of transfer to George Baker (Shipping) Limited.
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