Company registration number: 07067364
COMPANY INFORMATION
CONTENTS
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
Turnsea Limited is the holding company for the combined interests of Chymar SA and Maia Rangatira Limited in a fishing joint venture with Southern Cross Limited, a Falkland Islands company which holds fishing rights (Individual Transferable Quota – “ITQ”) in the Falkland Islands fisheries. The venture exists to utilise Southern Cross Limited’s fishing rights which are predominantly in the Falklands Calamari (Loligo) fishery. During 2022 Southern Cross Limited successfully applied to replace and extend its existing ITQ rights for a period of 25 years with ITQ”B” as provided for in the revised fisheries legislation. In order to meet the requirements for ITQ”B” it was necessary to further restructure the joint venture arrangements in September 2022 when Turnsea Limited transferred part of its interest in Golden Sea Limited to Southern Cross Limited in exchange for part of Southern Cross Limited’s interest in Golden Touza Limited. Southern Cross Limited’s ITQ rights had previously been exploited through the joint venture company Golden Touza Limited in which Turnsea Limited is the majority shareholder. With effect from 1st January 2023, fishing operations have been carried out by Golden Sea Limited utilising vessels owned by and chartered from Golden Touza Limited. Golden Sea Limited is owned 51% by Southern Cross Limited and 49% by Turnsea Limited.
Chymar SA provides fishing expertise whilst Maia Rangatira Limited provides marketing expertise and access, in particular for cephalopods.
The total group operating profit for the year was £181,653 (2022 - £5,879,783). Results continued to be driven by the results of the principal operating joint-venture company, (The “qualifying company” for Falkland Islands fisheries legislation purposes), which undertook the fishing operations. Golden Sea Limited succeeded Golden Touza Limited in that capacity with effect from 1st January 2023. The group’s primary objectives are to optimise its catch so as to utilise Southern Cross Limited’s ITQ as effectively and efficiently as possible utilising the allowable fishing effort associated with that ITQ.
During 2023 the joint-venture continued to concentrate on the Falklands Calamari fishery. Catch volumes for the first campaign whilst a little less than those of the previous year were good. However, as a result of natural factors the Falkland Islands Government Fisheries Department decided to close the second campaign early, and catches for that campaign were more than 50% below those of the previous year. This resulted in an overall catch reduction for the year of 24%.
During 2023 the joint-venture continued to concentrate on the Falklands Calamari fishery. Catch volumes for the first campaign whilst a little less than those of the previous year were good. However, as a result of natural factors the Falkland Islands Government Fisheries Department decided to close the second campaign early, and catches for that campaign were more than 50% below those of the previous year. This resulted in an overall catch reduction for the year of 24%.
As a consequence of the disappointing second campaign the value of catch sales fell below budget. Whilst every effort was made to contain costs, a significant proportion of expenses have substantially fixed characteristics, and could not be reduced proportionately to the time spent fishing and catches achieved. Particular examples include fuel and licence fees, the latter being 17% higher than for the previous year. The short notice of early closure also impacted transshipment logistics efficiency.
Notwithstanding these problems, the group's net profit after tax was £384,252 (2022 - £4,244,712). In consequence of the group’s restructuring the results of the year are not directly comparable to those of the previous year. The directors were however satisfied with the results for the year.
In June 2023 Turnsea Limited purchased from each of its shareholders 600,000 shares in the company for a consideration of £600,000.
The group retains a strong balance sheet with shareholders’ funds at 31 December 2023 standing at £17,204,851 (2022 - £18,032,028). The Directors have continued to work with the joint-venture partners to review all aspects of their business model to ensure optimum efficiency in evolving circumstances and believe that the group is well placed to maintain successful operations. The group has reached an advanced stage of design and specifications for a new vessel and is commencing discussions with shipyards regarding its construction.
The group retains a strong balance sheet with shareholders’ funds at 31 December 2023 standing at £17,204,851 (2022 - £18,032,028). The Directors have continued to work with the joint-venture partners to review all aspects of their business model to ensure optimum efficiency in evolving circumstances and believe that the group is well placed to maintain successful operations. The group has reached an advanced stage of design and specifications for a new vessel and is commencing discussions with shipyards regarding its construction.
The greatest uncertainties faced by the group are catch levels which can vary significantly in consequence of climatic conditions such as ocean temperature and its effect on spawning levels, growth rates and movements of the targeted species. These factors are out of the directors’ control. However, they seek to respond to them and mitigate risk by careful planning of fishing campaigns having regard to monitored trends in the fisheries and building in as much flexibility as possible to manage the effects of unforeseen circumstances. During fishing campaigns, the directors remain in constant contact with the vessel captains, monitoring daily catch reports and other operational considerations.
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GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The Falkland Islands fisheries are generally regarded as some of the best managed in the world with high emphasis on sustainability and environmental protection. The group operates its vessels to the highest standards in order to maintain its status in these fisheries. Vessel investments have been made to ensure this is possible. These include crew and government fisheries observer accommodation, discard holding tanks and wildlife protection measures.
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their report and the financial statements for the year ended 31 December 2024.
The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments 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 Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £NIL (2023 - £417,601).
Dividends of £Nil (2022 - £1,200,000) were paid during the year.
The directors who served during the year were:
Having regard to all of the factors considered in the group strategic report, and in particular to the restructuring of the joint venture to allow Southern Cross Limited to successfully apply for extension of its fishing rights (ITQ”B”) the directors consider the group in a strong position to exploit the available fishing effort with increased efficiency and to continue to market its catch to maximum advantage.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
On 16th August 2024 the Falklands Islands Government announced the cancellation of the second Loligo season.
This is expected to impact the entity's results in 2024.
This is expected to impact the entity's results in 2024.
The auditors, Menzies LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TURNSEA LIMITED
We have audited the financial statements of Turnsea Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2024, which comprise the Consolidated statement of comprehensive income, the Consolidated statement of financial position, the Company statement of financial position, the Consolidated statement of cash flows, the Consolidated statement of changes in equity, the Company statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TURNSEA LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report or the Directors' report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TURNSEA LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
∙The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation, and general regulations such as health and safety. There are no industry specific laws and regulations which would be deemed to have a significant impact on the financial statements. We assessed the extent of compliance with the appropriate laws and regulations as part of our procedures on the related financial statement items.
∙We understood how the Company is complying with the legal and regulatory frameworks by, making inquiries to management, those responsible for legal and compliance procedures and the company secretary. We corroborated our inquiries through our review of board minutes.
∙The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognize non-compliance with laws and regulations. The assessment did not identify any issues in this area.
∙We assessed the susceptibility of the Company financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:
°Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
°Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
°Challenging assumptions and judgments made by management in its significant accounting estimates; and
°Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
∙As a result of the above procedures, we considered the opportunities and incentives that may exist within the
organisation for fraud and identified the greatest potential for fraud in the following areas:
organisation for fraud and identified the greatest potential for fraud in the following areas:
°Posting of unusual journals and complex transactions.
°Misappropriation of funds through fraudulent purchase ledger and payroll activity.
°Manipulation of amounts subject to significant judgment or estimate.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TURNSEA LIMITED (CONTINUED)
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 Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditor
3000a Parkway
Hampshire
PO15 7FX
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 21 to 40 form part of these financial statements.
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COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 21 to 40 form part of these financial statements.
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