MARITIME_CARGO_PROCESSING - Accounts

The directors present the strategic report for the year ended 31 December 2022.

The principal activity of the company continues to be the development and provision of computer services and consultancy for integrated port information systems centred around Destin8, the leading port community system within the UK. Its customer base consists of: ports, shipping lines, freight forwarders, customs clearance agents and hauliers. The company also provides access to Destin8 to various government agencies including HMRC, Border Force, Port Health, the Forestry Commission, Special Branch and Trading Standards.

During the year ended 31 December 2022 total revenue increased to £18,460,515 (2021: £15,845,564). Previously revenue principally reflected performance at the Port of Felixstowe. Whilst it remains a substantial constituent, revenue is now more evenly balanced across locations using Destin8.

Development of Destin8 continued, with significant updates during the year. The most significant providing for alpha numeric UCN (unique consignment number) handling. Other enhancements complementary to Destin8 continue to be identified and developed in order to maintain a market leading performance. This includes a detailed review of the underlying infrastructure and cloud-based storage.

Risk management is an important part of the management processes of the company and systems of internal control have been developed to address the principal risks. A policy of continual improvement has been adopted when assessing the adequacy of internal controls by means of a regular review.

The company faces specific risks at a number of levels:

Strategic – the company is focused on the continued development of Destin8. Best practice technical and project management procedures are being followed to mitigate the risks.

Political – the company’s financial model relating to transactional unit charging may be affected by changes in customs systems and the introduction of HM Government’s GVMS system. The company is closely monitoring developments.

Competitive – the competitive environment for port operations in the UK is becoming more challenging. This might have an adverse impact on the company’s turnover and profitability in the future.

Operational – the retention of key staff is very important. Attracting, developing and retaining staff is discussed regularly by the board.

Financial – the company strives to protect its financial position. The company has in place strict credit control and contract policies.

Treasury – substantially all of the company’s operations are UK based and as such there is no material exposure to foreign currencies and associated exchange rate fluctuations. The company has no borrowing facilities. Surplus funds are placed with banks of the highest credit rating.

Health and safety – the company aims to provide a safe and comfortable working environment for its staff and visitors..

Compliance – there are no specific pieces of legislation with which the company has to comply to operate, however the board keeps under review the company’s compliance with relevant laws and regulations.

The following non-financial KPIs are some of the tools used by management to monitor the performance of the business:

- Staff turnover

- Customer satisfaction levels

- Development scope

The Destin8 system is monitored by many KPIs, however the most important are:

- Number of work requests

- Time to complete work requests

- Availability of Destin8

- Number of customer service calls

The following KPI's are some of the tools used by management to monitor the operating performance of the business:

Indicator                            2022        2021

Turnover growth                     16.50%     137.92%

Sales per employee                 £615,351 £565,913    

Operating profit growth                 18.18%     232.42%

Operating profit per employee             £507,727     £460,295

Conversion of net profit to cash                 108%           109%

Debtor days                         62         56

The company ended the year with cash at bank of £15.4 million (2021: £13.1 million).

Section 172 of the Companies Act 2006 requires a director of a company to act in the way he or she considers, in good faith, would most likely promote the success of the company for the benefit of its members as a whole. In doing this, section 172 requires directors to have regard to, amongst other matters, the:

1. likely consequences of any decisions in the long-term;

2. interests of the company’s employees;

3. need to foster the company’s business relationships with suppliers, customers and others;

4. impact of the company’s operations on the community and environment;

5. desirability of the company maintaining a reputation for high standards of business conduct; and

6. need to act fairly as between members of the company.

In discharging their section 172 duties the directors have regard to the factors set out above. By considering the company’s purpose, vision and values together with its strategic priorities and having a process in place for decision-making, the directors aim to make sure that their decisions are consistent and appropriate in all circumstances.

By order of the board

The directors present their annual report and financial statements for the year ended 31 December 2022.

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

Directors liabilities

The company maintains directors’ and officers’ liability insurance which provides insurance cover against liabilities directors and other officers of the company may incur personally in their capacity as directors and officers. The qualifying third party indemnity provision was in force during the financial period and also at the date of approval of the financial statements.

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

Two interim dividends of £4,440,400 and £6,660,600 were paid during the year (2021: £3,330,300). The directors do not recommend payment of a final dividend.

During the year the company continued to develop Destin8. This included engaging heavily with HMRC and the UK government on the development of enhancements to Destin8 related to developing systems.

No significant events have occurred between 31 December 2022 and the date of authorisation of these financial statements.

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. 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 and

•     state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The principal activity of the company is disclosed in the Strategic Report as part of the review of the business.

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.

The company sets out its payment practice in its standard terms and conditions or where applicable abides by its suppliers terms and conditions. The number of creditor payment days in respect of the financial year was: 241 (2021: 16).

During the year the company made charitable donations of £5,500. Payments were made of £1,000 each to Mayor of Felixstowe charity fund, Cuppa, BASIC Life, Level Two Youth & Suffolk MIND & £500 to Old Felixstowe Community (2021: £1,750).

We have audited the financial statements of Maritime Cargo Processing p.l.c. (the 'company') for the year ended 31 December 2022 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

•     give a true and fair view of the state of the company's affairs as at 31 December 2022 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Other information

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

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• 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.

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.

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.

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.

Based on our understanding of the Company and industry, we identified that the principal risks of non-compliance with laws and regulations related to port clearance systems requirements, and considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that impact directly on the preparation of the financial statements including the Companies Act, and UK tax legislation.

We considered managements incentives and opportunities for fraudulent adjustments to the financial statements including override of controls and determined that the principal risks were related to inappropriate journal entries or fraudulent transactions that would result in the manipulation of profits.

Audit procedures included:

• Making enquiries of management for known or suspected instances of fraud or non-compliance with laws and regulations.

• Consideration of management’s procedures for detecting and preventing fraud, including controls.

• Reviewing journal entries to identify material or unusual transactions.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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.

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

Maritime Cargo Processing p.l.c. is a company limited by shares incorporated in England and Wales. The registered office is The Chapel, Maybush Lane, Felixstowe, Suffolk, IP11 7LL.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

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

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Turnover generated from subscriptions is invoiced quarterly in advance, with the invoices being issued in the month preceding the forthcoming quarter. The accruals basis is applied in the financial statements to ensure that revenue is recognised in the period to which it relates.

Turnover generated from port transactions processed in the month is invoiced in that month.

All turnover is stated net of value added tax.

Revenue and costs in respect of port transactions where the Company is acting in the capacity as agent are netted off in the financial statements.

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:

Freehold land is not depreciated.

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.

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.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the statement of comprehensive income in other operating charges.

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.

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

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

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

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

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.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.

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

Expenditure on research and development is expensed to the profit and loss account in the year which it is incurred.

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.

An analysis of the company's turnover is as follows:

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

Their aggregate remuneration comprised:

Investment income includes the following:

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:

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

The net deferred tax liability expected to reverse in the year ended 31st December 2023 is estimated at £12,662. This primarily relates to the reversal of timing differences on acquired tangible assets and capital allowances through depreciation, offset by expected tax deductions when payments are made to utilise provisions.

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.

The charge to profit or loss in respect of defined contribution schemes was £147,880 (2021 - £131,884).

The rights attached to the Ordinary 'A' shares are the right to vote at meetings of the company and the repayment of paid up share capital in winding-up or other repayment.

The rights attached to the Ordinary 'B' shares are the right to participate in the profits of the company and the repayment of paid up capital and any residual in a winding-up or other capital repayment.

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:

During the year the company traded with investors in the entity who are A Shareholders. The company received goods and services to the value of £939,992 (2021 £812,661) of which £182,874 was owed at 31 December 2022 (2021 £1,557). Included within turnover is £63,008 (2021 £61,720) of which £8,779 was outstanding at 31 December 2022 (2021 £5,003).

During the year the company paid interim dividends to the above companies of £6,000,000 (2021 £1,800,000).