Company Registration No. 04995662 (England and Wales)
KERSEY FREIGHT LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
LB GROUP
1 Vicarage Lane
Stratford
London
E15 4HF
KERSEY FREIGHT LIMITED
COMPANY INFORMATION
Directors
Mr D Crawford
Mr J Mainwaring
Mrs L Crawford
Mrs E Mainwaring
Secretary
Mr J Mainwaring
Company number
04995662
Registered office
Unit 42
Lady Lane Industrial Estate
Hadleigh
Ipswich
Suffolk
IP7 6BQ
Auditor
LB Group Limited (Stratford)
1 Vicarage Lane
Stratford
London
E15 4HF
KERSEY FREIGHT LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Income statement
9
Statement of financial position
10
Statement of changes in equity
11
Notes to the financial statements
12 - 24
KERSEY FREIGHT 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
During the year turnover increased 3.3% (2022: decreased by 0.97%) and the company achieved a gross profit margin of 13.74% (2022 : 17.04%).
Profit before tax has decreased from £1,203,958 reported for 2022 to a loss of £12,699
The Directors are pleased with the financial performance of the company for the year. 2023 was an incredibly challenging year for the business and the industry as a whole. Despite having a fall margins and profitability, the results, post depreciation charges, broadly show a break even position, and the company secured some significant new customer contracts and was able to reduce its cost base. The effect of these have helped the company return to profitability in its 2024 results to date.
Principal risks and uncertainties
These continue to be the ongoing impact from the difficulties facing the UK economy, and higher interest rates. Whilst our results for the financial year ended 31 December 2023 appear disappointing at first glance, the actions taken by the business in the year have enabled the company to return to profitability in 2024, whilst being able to service all of its debt comfortably. The recent reduction in UK interest rates is most welcomed and will enable the company to beat its 2024 profitable forecast by even more than it currently is performing at. The company continues to be cash focused and continually looks to grow its turnover base with both existing and new clients.
Development and performance
The company's aim is to continue to achieve growth in terms of market share and profitability, and to strengthen its Balance Sheet further more in future years.
Key performance indicators
Given the straight forward nature of the business, the company's directors are of the opinion that a more detailed analysis, using key performance indicators, is not necessary to understand the development, performance or position of the business.
Future developments and post balance sheet events
The company continues to recruit new staff and to invest in its fleet to ensure that its service delivery and industry reputation is maintained. The company recognises the challenges facing the haulage industry and continues to meet such challenges head on to continue to drive its profitability.
The company has secured significant new customer contracts, and with a focus on stronger cost control and procurement, 2024 has already seen a return to profitability.
No events have occurred post year end that would impact on these financial statements, or on our ability to meet our future vision.
Mr D Crawford
Director
18 September 2024
KERSEY FREIGHT LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
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 the supply of haulage services.
Results and dividends
The results for the year are set out on page 9.
Dividends of £240,600 have been paid to Kersey Holdings Limited.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr D Crawford
Mr J Mainwaring
Mrs L Crawford
Mrs E Mainwaring
Auditor
LB Group Limited (Stratford) were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Each of the persons who is a director at the date of approval of this report confirm that:
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments and post balance sheet events.
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
KERSEY FREIGHT LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
On behalf of the board
Mr D Crawford
Director
18 September 2024
KERSEY FREIGHT 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.
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.
KERSEY FREIGHT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF KERSEY FREIGHT LIMITED
- 5 -
Opinion
We have audited the financial statements of Kersey Freight Limited (the 'company') for the year ended 31 December 2023 which comprise the income statement, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 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.
KERSEY FREIGHT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF KERSEY FREIGHT LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
KERSEY FREIGHT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF KERSEY FREIGHT LIMITED
- 7 -
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
We identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the haulage sector;
We focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, data protection, anti-bribery, employment, environmental and health and safety legislation;
We assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
Identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
Making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
Considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
Performed analytical procedures to identify any unusual or unexpected relationships;
Tested journal entries to identify unusual transactions;
Reviewed the internal controls in place, specifically around payroll and bank transactions;
Assessed whether judgements and assumptions made in determining the accounting estimates around depreciation were indicative of potential bias; and
Investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
Agreeing financial statement disclosures to underlying supporting documentation;
Reading the minutes of meetings of those charged with governance;
Enquiring of management as to actual and potential litigation and claims; and
Reviewing correspondence with HMRC and the company's legal advisors.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance.
Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
KERSEY FREIGHT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF KERSEY FREIGHT LIMITED
- 8 -
Mark Middleton
Senior Statutory Auditor
For and on behalf of LB Group Limited (Stratford)
18 September 2024
Chartered Accountants
Statutory Auditor
1 Vicarage Lane
Stratford
London
E15 4HF
KERSEY FREIGHT LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
4
20,280,483
19,625,593
Cost of sales
(17,493,121)
(16,282,038)
Gross profit
2,787,362
3,343,555
Administrative expenses
(2,298,714)
(2,433,092)
Exceptional item
3
626,864
Operating profit
5
488,648
1,537,327
Interest payable and similar expenses
9
(501,347)
(333,369)
(Loss)/profit before taxation
(12,699)
1,203,958
Tax on (loss)/profit
10
252,528
62,189
Profit for the financial year
239,829
1,266,147
The income statement has been prepared on the basis that all operations are continuing operations.
KERSEY FREIGHT LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
11,523,957
11,836,185
Current assets
Stocks
14
11,210
15,527
Debtors
13
4,335,541
4,257,221
Cash at bank and in hand
742
66,868
4,347,493
4,339,616
Creditors: amounts falling due within one year
15
(6,185,604)
(4,892,277)
Net current liabilities
(1,838,111)
(552,661)
Total assets less current liabilities
9,685,846
11,283,524
Creditors: amounts falling due after more than one year
16
(4,682,173)
(6,026,552)
Provisions for liabilities
Deferred tax liability
18
987,348
1,239,876
(987,348)
(1,239,876)
Net assets
4,016,325
4,017,096
Capital and reserves
Called up share capital
20
26,000
26,000
Profit and loss reserves
21
3,990,325
3,991,096
Total equity
4,016,325
4,017,096
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 18 September 2024 and are signed on its behalf by:
Mr D Crawford
Mr J Mainwaring
Director
Director
Company registration number 04995662 (England and Wales)
KERSEY FREIGHT LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
26,000
2,922,415
2,948,415
Year ended 31 December 2022:
Profit and total comprehensive income
-
1,266,147
1,266,147
Dividends
11
-
(197,466)
(197,466)
Balance at 31 December 2022
26,000
3,991,096
4,017,096
Year ended 31 December 2023:
Profit and total comprehensive income
-
239,829
239,829
Dividends
11
-
(240,600)
(240,600)
Balance at 31 December 2023
26,000
3,990,325
4,016,325
KERSEY FREIGHT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
Kersey Freight Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 42, Lady Lane Industrial Estate, Hadleigh, Ipswich, Suffolk, IP7 6BQ.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Kersey Holdings Limited. These consolidated financial statements are available online from Companies House.
1.2
Going concern
At 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.true
The directors forecast a strong 2024 which is supported by the actual year to date results and these actual year to date results shows that the profitability of the company to be in excess of this forecast and cash availability remains strong at the date of this report. The directors therefore confidently continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for haulage 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.
Revenue is recognised when the haulage job is delivered.
KERSEY FREIGHT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
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:
Leasehold land and buildings
4% straight line
Commercial vehicles
25% reducing balance / 12.5% straight line
Fixtures, fittings and computer equipment
20% straight line
Trailers
8.33% 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.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Fuel stock is calculated using the average price per litre.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
KERSEY FREIGHT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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.
KERSEY FREIGHT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.10
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 income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
KERSEY FREIGHT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
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 income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset 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.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
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.
KERSEY FREIGHT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 17 -
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.
Depreciation / useful economic life
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses. Depreciation is calculated based on estimated residual values of each asset at the end of their useful economic life. Calculation of these provisions requires judgements to be made, which include forecast consumer demand and the economic environment.
3
Exceptional item
2023
2022
£
£
Expenditure
Exceptional - profit on sale of assets
-
(626,864)
Exceptional items relate to the profit made on the sale of fixed assets as a result of an increase in the used truck market.
4
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Haulage services
20,280,483
19,625,593
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
17,708,559
16,978,032
EU
2,571,924
2,647,561
20,280,483
19,625,593
5
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Depreciation of owned tangible fixed assets
523,138
404,701
Depreciation of tangible fixed assets held under finance leases
1,225,794
988,629
Profit on disposal of tangible fixed assets
(30,338)
(626,864)
Operating lease charges
150,869
149,312
KERSEY FREIGHT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
6
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
10,650
9,295
For other services
All other non-audit services
18,000
7
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Drivers
83
76
Administration
27
28
Total
110
104
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
4,963,362
4,528,592
Social security costs
551,572
473,339
Pension costs
99,556
172,178
5,614,490
5,174,109
8
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
50,984
24,984
Company pension contributions to defined contribution schemes
-
79,500
50,984
104,484
9
Interest payable and similar expenses
2023
2022
£
£
Interest on finance leases and hire purchase contracts
501,347
333,369
KERSEY FREIGHT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
10
Taxation
2023
2022
£
£
Deferred tax
Origination and reversal of timing differences
(252,528)
(62,189)
The main rate of Corporation Tax increased from 19% to 25% from 1 April 2023. Therefore the effective tax rate for the company during the year is 23.52%.
The actual credit for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
(Loss)/profit before taxation
(12,699)
1,203,958
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(2,987)
228,752
Tax effect of expenses that are not deductible in determining taxable profit
11,577
9,849
Tax effect of utilisation of tax losses not previously recognised
(28,625)
Unutilised tax losses carried forward
(1,372,567)
Permanent capital allowances in excess of depreciation
20,035
1,133,967
Deferred tax credit
(252,528)
(62,190)
Taxation credit for the year
(252,528)
(62,189)
11
Dividends
2023
2022
£
£
Final paid
240,600
197,466
KERSEY FREIGHT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
12
Tangible fixed assets
Leasehold land and buildings
Plant and equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
1,178,172
13,445,872
371,560
14,995,604
Additions
7,984
1,359,738
94,145
1,461,867
Disposals
(70,687)
(70,687)
At 31 December 2023
1,186,156
14,805,610
395,018
16,386,784
Depreciation and impairment
At 1 January 2023
247,884
2,743,097
168,438
3,159,419
Depreciation charged in the year
54,265
1,614,989
79,678
1,748,932
Eliminated in respect of disposals
(45,524)
(45,524)
At 31 December 2023
302,149
4,358,086
202,592
4,862,827
Carrying amount
At 31 December 2023
884,007
10,447,524
192,426
11,523,957
At 31 December 2022
930,288
10,702,775
203,122
11,836,185
The net carrying value of tangible fixed assets includes the following in respect of assets held under hire purchase contracts.
2023
2022
£
£
Plant and equipment
7,848,051
9,393,957
Motor vehicles
192,425
203,121
8,040,476
9,597,078
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
4,016,777
4,128,599
Amounts owed by group undertakings
208,000
Other debtors
6,981
Prepayments and accrued income
110,764
121,641
4,335,541
4,257,221
KERSEY FREIGHT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
14
Stocks
2023
2022
£
£
Fuel stock
11,210
15,527
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
1,686,502
891,362
Obligations under finance leases
17
2,365,277
2,168,429
Trade creditors
1,222,874
946,303
Taxation and social security
490,478
168,137
Other creditors
155,878
164,348
Accruals and deferred income
264,595
553,698
6,185,604
4,892,277
Included within bank loans and overdrafts is an amount of £1,470,259 (2022: £874,730) in relation to an invoice discounting facility. This facility is secured by way of a fixed and floating charge held by Barclays Bank PLC dated 11 January 2011.
Barclays Bank also hold a Debenture dated 3 March 2004, over all property and assets of the company.
Hire purchase agreements are secured on the assets concerned.
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
17
4,682,173
6,026,552
Hire purchase agreements are secured on the assets concerned.
KERSEY FREIGHT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
2,365,277
2,168,429
In two to five years
4,682,173
6,026,552
7,047,450
8,194,981
Payments under hire purchase agreements represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
2,075,987
2,612,443
Tax losses
(1,088,639)
(1,372,567)
987,348
1,239,876
2023
Movements in the year:
£
Liability at 1 January 2023
1,239,876
Credit to profit or loss
(252,528)
Liability at 31 December 2023
987,348
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
99,556
172,178
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.
KERSEY FREIGHT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
26,000
26,000
26,000
26,000
21
Reserves
Profit and loss reserves
The profit and loss reserve includes all current and prior retained profits and losses.
22
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
112,804
219,674
Between two and five years
378,447
284,012
In over five years
171,500
491,251
675,186
23
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
-
1,184,227
24
Related party transactions
At the statement of financial position date the company was owed £208,000 (2022: £NIL) from Kersey Holdings Limited, the parent company.
There is a personal guarantee of £50,000 executed by the directors in relation to the invoice discounting facility.
KERSEY FREIGHT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
25
Directors' transactions
Description
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Directors loan accounts
(25,919)
(76,288)
101,213
(994)
These balances have been included within other creditors
26
Ultimate controlling party
The parent company of Kersey Freight Limited is Kersey Holdings Limited.
There are no ultimate controlling parties.
The results of Kersey Freight Limited are consolidated within the group accounts of Kersey Holdings Limited. The registered office of Kersey Holdings Limited is Unit 42, Lady Lane Industrial Estate, Hadleigh, Ipswich, Suffolk, England, IP7 6QB and the financial statements of the group are available through Companies House for public inspection.
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