Company registration number 03553606 (England and Wales)
IMPERIAL SHIPPING LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
IMPERIAL SHIPPING LIMITED
COMPANY INFORMATION
Directors
M R Coleman
K J Coleman
Secretary
M R Coleman
Company number
03553606
Registered office
200 Court Road
Eltham
London
SE9 4EW
Auditor
Gravita II LLP
Aldgate Tower
2 Leman Street
London
E1 8FA
Business address
200 Court Road
Eltham
London
SE9 4EW
IMPERIAL SHIPPING LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Notes to the financial statements
12 - 20
IMPERIAL SHIPPING LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present their Strategic Report for the year ended 31 December 2023.

Principal activities and review of the business

The principal activity of the company is that of ship chartering and operating.

 

The company’s results for the year show a gross profit of $3.8m (2022: $7.9m) from its chartered voyages. All Dry Bulk cargo markets experienced reduced earnings through 2023 with a consequential decline in margins. In our Handy-size sector time charter rates fluctuated and exposure to the spot market was often difficult. Rates were unpredictable with owners always aiming to maintain higher levels and holding out until the last minute. The general downward drift was interrupted by spikes which were not always easy to avoid.

 

Trading conditions were not conducive to expansion but in terms of cargo volumes and number of voyages executed we managed to maintain our position. Market share remained roughly the same as in 2022.

 

The main market for southbound voyages continues to be Egypt where the country’s financial position remained fragile. The lack of availability of dollars restricted trade in all segments with sawn timber having less priority than some other imported goods which are considered to be more essential. Sawmills and traders have struggled to deal with the consequences and, in some cases, have been forced to adopt new approaches. Traders without cashflow have been unable to confirm business until advance payments are received which is often at very last minute. Traders with cash are in short supply. Some of the main sawmills (all of which have experienced a drop in selling prices against a rising cost base) have been forced to sit on stocks until sales materialise and have not moved goods in more usual regular flows. The result for the shipping companies is that the final cargo loaded on the vessel is seldom the one which was planned for. The lack of predictability has led to inefficiencies with, for example, more ports being used to fulfil the loading as ships search around for the available cargo. Ship-operators are doing themselves no favours by reducing freight prices to entice last minute parcels to load but the tactic is often unavoidable.

The customer base is changing since Sawmills have, in some cases, experimented in dealing with new clients who have the attraction of being cash buyers. Some of these may be transferring their experience of other markets to the timber trade which is not always easy to accommodate.

 

The northbound trade from Eastern Mediterranean has remained fairly constant over 2023 except for the shipment of windmill blades and towers. This segment dropped due to more competition from multi-purpose and smaller deadweight vessels which are no longer being employed in the container trades. It will be difficult for this segment to re-emerge under such conditions.

 

The arbitration between Imperial and one of its counterparties is making slow progress with no resolution anticipated in the near future.

 

IMPERIAL SHIPPING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Future developments

During 2024 Imperial is generally benefiting from several longer-term charters which cover multiple voyages. These charters are useful when trying to avoid the aforementioned market spikes, but such events are by their nature unpredictable and have been of a shorter duration than expected. Our timings have been somewhat fortuitous in this respect, but we are cautious of taking too many longer positions when a negative sentiment is pervasive.

 

Cash flow management remains an engaging exercise. Freight payment arrears remain a challenge.

There has been some stability in sentiment in Egypt buoyed by announcements of major government projects, but general conditions are depressed, and inflation is high. Devaluation of the local currency has continued but downward movements are predictable. Many trades in Egypt have relied on the supply of dollars from the unofficial Black Market but dollar traders have closed doors after pressure from the authorities. Commodity traders are looking for new ways to do business and somehow, they manage to adapt their models, but this often demands more flexibility and sacrifice from those with whom they engage. Shipping is no exception.

 

We continue to rely on the willingness of one of our collaborative shipping partners and vessel suppliers to support our operations by exercising tolerance of delayed inward payments. Our predictions of better cash flows have not materialised as anticipated. Improvement is always around the corner, but the bend is a long one. We are actively putting in place measures which will offer some security against due debts, but these are not quick fix solutions. We are, however, confident that the consequences of cash flow pressure can be managed, mitigated and resolved in the medium term.

 

Financial risk management

The directors have identified the need to manage the company’s material financial risks which are principally liquidity risk, foreign exchange risk and going concern risk as follows:

 

The company finances its business from a combination of cash flow arising from its operations and intercompany borrowing. Liquidity risk is the risk that the company will encounter difficulties in meeting its obligations. This risk is managed by ensuring that regular reviews of the cash flow are undertaken so that the company can meet its obligations in order to continue to finance its operations and investments

 

The company’s activities are principally conducted in US dollars as well as Euros. The directors closely monitor the company’s exposure. The directors have considered the use of derivative instruments when commercially appropriate to assist in managing such risks. No such instruments were held by the company at any time during the year or at the year end.

 

A potential financial risk also exists in respect of funding requirements over the short to medium term. The directors review the company’s funding requirements on a regular basis and maintain on-going monitoring in respect of trading performance and future working capital requirements. This risk is discussed in more detail in Note 1.2 Going Concern.

On behalf of the board

M R Coleman
Director
23 January 2025
IMPERIAL 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 that of ship chartering and operating.

Directors

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

M R Coleman
K J Coleman
Results and dividends

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

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

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.

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
M R Coleman
Director
23 January 2025
IMPERIAL 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:

 

 

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.

IMPERIAL SHIPPING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF IMPERIAL SHIPPING LIMITED
- 5 -

Qualified Opinion

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

In our opinion, except for the effects of the matter described in the Basis for qualified opinion section of our report, the financial statements:

Basis for qualified opinion

As explained in Note 8 to the financial statements, as at the reporting date the company has a trade debtor balance owed by a principal trading partner of $1.33m (net of a provision brought forward of $3.1m) and a loan balance owed by that partner of $7.04m. Recovery of these balances is dependant upon the continuing trading of this partner and also the relaxation of US $ foreign currency controls by the Egyptian authorities. Whilst the directors remain confident of the full recovery of these balances, in 2024 the net trading exposure has reduced by $180k whilst the loan balance remains unchanged at $7.04m. We were unable to obtain sufficient appropriate audit evidence about the recoverability of these balances because it is not possible to forecast with any degree of certainty how the Egyptian authorities will deal with the ongoing US $ currency problems and thus the possible future impact on the ability of this trading partner to continue to trade in this jurisdiction. Consequently, we were unable to determine whether any adjustments to these amounts were necessary. In addition, were any adjustments to these amounts to be required, the strategic report would also need to be amended.

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 qualified opinion.

Material uncertainty relating to going concern

We draw attention to note 1.2 to the financial statements concerning the Company’s ability to continue as a going concern. As explained in note 1.2 the Company’s forecasts depend upon factors which are inherently uncertain in the current economic environment. These conditions along with other matters as set forth in note1.2 indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Company were unable to continue as a going concern. Our opinion is not modified in respect of this matter.

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.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

IMPERIAL SHIPPING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF IMPERIAL SHIPPING LIMITED
- 6 -

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the recoverability of trade and loan balances totalling $8.37m at 31 December 2023. We have concluded that where the other information refers to these balances or related balances such as profit before tax, it may be materially misstated for the same reason.

Opinions on other matters prescribed by the Companies Act 2006

Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of our audit:

Matters on which we are required to report by exception

In respect solely of the limitation on our work relating to specific debtor balances, described above:

 

Except for the matter described in the basis for qualified opinion section of our report, 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 and the directors' report.

Arising solely from the limitation on the scope of our work relating to specific debtor balances, referred to above:

 

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

IMPERIAL SHIPPING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF IMPERIAL SHIPPING LIMITED
- 7 -
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. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.

The extent to which the audit was considered capable of detecting irregularities including fraud.

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:

 

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

 

To address the risk of fraud through management bias and override of controls, we:

IMPERIAL SHIPPING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF IMPERIAL SHIPPING LIMITED
- 8 -

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

 

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 by for example forgery, or intentional misrepresentation or through collusion. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.

Ian Hughes ACA
Senior Statutory Auditor
For and on behalf of Gravita II LLP
24 January 2025
Chartered Accountants
Statutory Auditor
Aldgate Tower
2 Leman Street
London
E1 8FA
IMPERIAL SHIPPING LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
$
$
Turnover
2
40,065,584
48,391,797
Cost of sales
(36,254,421)
(40,531,680)
Gross profit
3,811,163
7,860,117
Administrative expenses
276,935
(4,390,420)
Operating profit
3
4,088,098
3,469,697
Interest receivable and similar income
-
0
164
Profit before taxation
4,088,098
3,469,861
Tax on profit
5
-
0
-
0
Profit for the financial year
4,088,098
3,469,861

The income statement has been prepared on the basis that all operations are continuing operations.

IMPERIAL SHIPPING LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
$
$
$
$
Fixed assets
Investments
6
776,514
776,514
Current assets
Debtors
8
38,867,865
38,047,464
Cash at bank and in hand
7,830
2,704
38,875,695
38,050,168
Creditors: amounts falling due within one year
9
(24,644,519)
(27,907,090)
Net current assets
14,231,176
10,143,078
Net assets
15,007,690
10,919,592
Capital and reserves
Called up share capital
10
16,300
16,300
Profit and loss reserves
11
14,991,390
10,903,292
Total equity
15,007,690
10,919,592

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 23 January 2025 and are signed on its behalf by:
M R Coleman
Director
Company registration number 03553606 (England and Wales)
IMPERIAL SHIPPING LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
$
$
$
Balance at 1 January 2022
16,300
7,433,431
7,449,731
Year ended 31 December 2022:
Profit and total comprehensive income
-
3,469,861
3,469,861
Balance at 31 December 2022
16,300
10,903,292
10,919,592
Year ended 31 December 2023:
Profit and total comprehensive income
-
4,088,098
4,088,098
Balance at 31 December 2023
16,300
14,991,390
15,007,690
IMPERIAL SHIPPING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

Imperial Shipping Limited is a private company limited by shares incorporated in England and Wales. The registered office is 200 Court Road, Eltham, London, SE9 4EW.

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 US dollars, 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:

 

 

The financial statements of the company are consolidated in the financial statements of Sequana Maritime Limited. These consolidated financial statements are available from its registered office, 200 Court Road, Eltham, London SE9 4EW.

The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

IMPERIAL SHIPPING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.2
Going concern

At 31 December 2023, the Company had net current assets of $14.23m (2022: $10.14m) having recorded a profit after tax of $4.09m (2022: $3.47m).

The directors have reviewed the 2024 draft management accounts to November 2024 as well as preparing financial forecasts for 2025 on the basis of various trading and working capital assumptions. Based on its forecasting exercise the directors have concluded that the company will be profitable in 2024 and 2025. Forecasting for the company’s ongoing shipping operations is not an exact science with actual outturns being impacted by the general economic situation globally and especially the ongoing impact of the war in Ukraine and more recently the events in the Middle East which impacts upon time charter rates beyond the control of individual ship owning groups. In addition, although the directors remain confident that the trading balance and loans (Note 8) made to a principal trading partner remain fully recoverable, there can be no certainty as to the timing of this.

The forecast results do not include any further provision against outstanding trade debtors or loans advanced and nor do they forecast a significant reduction in the balance owed to the SOL group ($3.3m at the balance sheet date but currently increased to around $6.6m). The directors have concluded that the company remains reliant upon the continued support of the SOL group to enable it to continue trading as forecast. Relations with the SOL group remain excellent. There remains a charge on the balance owed to them (the debt being secured on a fellow subsidiary’s ship) and should the SOL group seek repayment of the outstanding balance then currently the vessel would likely need to be sold or new external finance sought. Currently the directors have no indication that the SOL group will seek repayment of the outstanding balance until the company and its fellow group companies are able to make repayment without causing any financial distress.

Based on the factors outlined above the directors have concluded that the company will be able to realise its assets and discharge its liabilities in the normal course of business for the foreseeable future. The directors have therefore continued to adopt the going concern basis in preparing these financial statements.

Although the directors are satisfied that adopting the going concern basis is appropriate, there can be no certainty that the outcome of the matters discussed above will be as forecast by the directors. Therefore, there exists a material uncertainty that may cast a significant doubt upon the company’s ability to continue as a going concern and to meet its liabilities as they fall due.

The financial statements do not include any adjustments to the value of the balance sheet assets, or provision for further liabilities which would result should the going concern concept not be valid.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT.

Chartered vessels

Contracts are made in the spot market for the use of a vessel for a specific voyage for a specified charter rate. If a charter agreement exists and collection of the related revenue is reasonably assured, revenue is recognised when the vessels have been fully loaded and have departed for their ultimate destination.

 

Voyage expenses, primarily consisting of port, canal, vessel charter hire and bunker expenses that are unique to a particular charter, are paid by the shipping companies under voyage charter arrangements. All voyage expenses are recognised in line with the related revenue. Ship management and commissions expenses are expensed as incurred.

1.4
Fixed asset investments

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

IMPERIAL SHIPPING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.5
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand.

1.6
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ 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.

IMPERIAL SHIPPING 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 and loans from fellow group companies, 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.

1.7
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.

1.8
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.

IMPERIAL SHIPPING 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.

1.9
Foreign exchange

Transactions in currencies other than US Dollar are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Turnover and other revenue

The total turnover of the company derives from its principal activity of shipping services outside the UK.

 

3
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
$
$
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(354,593)
778,804
Fees payable to the company's auditor for the audit of the company's financial statements
38,443
15,823
Bad and doubtful debts
(1,548,168)
1,985,638
4
Employees

There are no employees in Imperial Shipping Limited. None of the directors received any remuneration or emoluments through the company.

IMPERIAL SHIPPING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
5
Taxation

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
4,088,098
3,469,861
Expected tax charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
960,703
659,274
Tax effect of expenses that are not deductible in determining taxable profit
24,694
37,599
Tax effect of utilisation of tax losses not previously recognised
(792,957)
(122,773)
Other non-reversing timing differences
(83,329)
(722,023)
Loan relationship credits tax adjustment
(109,111)
(31)
Loan relationship debits tax adjustment
-
0
147,954
Taxation charge for the year
-
-
6
Fixed asset investments
2023
2022
Notes
$
$
Investments in subsidiaries
7
776,514
776,514
IMPERIAL SHIPPING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
7
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Address
Class of
% Held
shares held
Direct
Elder Shipping Limited
*
Ordinary
100.00
Older Shipping Limited
*
Ordinary
100.00
Senior Shipping Limited
*
Ordinary
100.00
Veteran Shipping Limited
*
Ordinary
100.00
Midlife Shipping Limited
*
Ordinary
100.00
Antique Shipping Limited
*
Ordinary
100.00
Doyen Shipping Limited
*
Ordinary
100.00
Medro Shipping Limited
*
Ordinary
100.00
Vikingland Limited**
*
Ordinary
100.00
Vegaland Limied**
*
Ordinary
100.00
Tyrusland Limited**
*
Ordinary
100.00
Thebeland Limited**
*
Ordinary
100.00
Primal Shipping Limited
*
Ordinary
100.00

Registered office addresses (all UK unless otherwise indicated):

*
200 Court Road, Eltham, London, SE9 4EW.

**These companies are wholly owned by Medro Shipping Company Limited.

 

8
Debtors
2023
2022
Amounts falling due within one year:
$
$
Trade debtors
8,888,699
12,202,397
Amounts owed by group undertakings
20,857,933
21,220,102
Other debtors
7,252,631
3,797,437
Prepayments and accrued income
1,868,602
827,528
38,867,865
38,047,464

Trade debtors are stated after provisions for impairment of $10.270m (2022: $11.331m).

 

Amounts owed by group undertakings are stated after provisions for impairment of $12.586m (2022: $12.728m). These are receivable balances that are unsecured, interest free and repayable on demand.

 

Included within Trade Debtors is approximately $1.33m (2022: $2.32m) due from a trading partner who also owes the company a loan balance of $7.04m (2022: $3.52m) (included in Other Debtors). The trade debtor balance is stated after provisions for impairment of $3.1m (2022: $3.1m). The company has continued to trade with this partner in 2024 but, although receiving monies for some 2023 and 2024 voyages, the overall net trading balance has only fallen by around $180k. At the date of approval of these financial statements, the loan balance outstanding remains at $7.04m with no repayments having been received. The amount of these balances outstanding is not in dispute and the directors remain confident that full settlement will be received. Currently however it is not possible to predict with any certainty the timing of the full recovery of the outstanding balances.

IMPERIAL SHIPPING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
9
Creditors: amounts falling due within one year
2023
2022
$
$
Trade creditors
5,376,512
10,078,539
Amounts owed to group undertakings
14,455,172
14,455,173
Other creditors
3,599,585
1,113,446
Accruals and deferred income
1,213,250
2,259,932
24,644,519
27,907,090

Included within amounts owed to group undertakings are trade payable balances that are unsecured, interest free, have no fixed date of repayment and are repayable on demand.

10
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
$
$
Issued and fully paid
Ordinary shares of £1 each
10,000
10,000
16,300
16,300

There is a single class of Ordinary shares. There are no restrictions on the distribution of dividends and repayment of capital.

11
Reserves
Profit and loss reserves

Profit and loss reserves represents accumulated comprehensive income for the year and prior periods less dividends paid.

12
Financial commitments, guarantees and contingent liabilities

The P&I claim against a 2021 voyage previously reported is still ongoing. The case will likely be going to arbitration in 2025 however no date has yet been set. The outcome is not certain, and currently although the directors remain confident of success it is not possible to predict with any accuracy what award could be made against the company should we be unsuccessful in the arbitration hearing. As a result, no provision for this has been made in the financial statements.

IMPERIAL SHIPPING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
13
Related party transactions
Transactions with related parties

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

2023
2022
Amounts due to related parties
$
$
Other related parties
1,094,839
1,113,447
14
Ultimate controlling party

Both the ultimate parent and the ultimate controlling party is considered to be Sequana Maritime Limited.

IMPERIAL SHIPPING LIMITED
MANAGEMENT INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2023
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