QUALITY FREIGHT SERVICES LIMITED - Limited company accounts 23.1

REGISTERED NUMBER: 03090860 (England and Wales)

QUALITY FREIGHT SERVICES LIMITED

Strategic Report, Report of the Director and

Financial Statements for the Year Ended 31 August 2022

Page

Company Information

1

Strategic Report

2

Report of the Director

3

Report of the Independent Auditors

4

Income Statement

8

Other Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

11

Cash Flow Statement

12

Notes to the Cash Flow Statement

13

Notes to the Financial Statements

14

DIRECTOR:

M J Johnson

REGISTERED OFFICE:

Unit 1 Peel House

Off Taunton Street

Shipley

West Yorkshire

BD18 3NA

REGISTERED NUMBER:

03090860 (England and Wales)

AUDITORS:

Walter Dawson & Son Chartered Accountants

1 Valley Court

Canal Road

Bradford

West Yorkshire

BD1 4SP

The director presents his strategic report for the year ended 31 August 2022.

REVIEW OF BUSINESS

The company has had another great year of organic growth with turnover increasing over 110%. Whilst there were several factors leading to this result the main two were the continued reinvestment back into the business by the recruitment of high calibre Freight Account Managers and the increase in levels of business from existing clients who have appreciated the 'one contact point' principal we operate and promote.

Again, through this financial year the increase in high calibre freight people has enhanced our image both internally, making all the staff feel proud of our company, and externally where previously sceptical potential employees are now more inclined to 'get on board' having seen their industry compatriots join and thrive.

Towards the end of the previous financial year, and predominantly because of customer demand, we employed a dedicated Compliance Manager who elevated our ISO9001 processes and thereby our accreditation opening doors to otherwise inaccessible 'Blue Chip' customers and thereby larger tranches of business. An additional benefit was that the tightening up of existing systems eradicated mistakes, slightly increased margins and reduced administrative staff queries which increased efficiency.

The continued recruitment of professional freight forwarders mentioned above, combined with increasing our network of offices across the country to 15 has given us access to new areas where the value of a local presence, compared to our competitors who have been increasingly centralising, has won us numerous customers who simply want professional attention and an appreciation of the nuances of their specific freight requirements.

We are also now experiencing some economies of scale, mainly with our head office administrative functions, thereby enabling us to increase our profitability.

Our future plans include a continuation of our recruitment policy of bringing in the best people and paying them well alongside the opening of new offices when appropriately qualified candidates are found.

As in the previous year, we do not envisage any capital investment other than the purchase of more computers and other IT items along with upgrading our bespoke operating and accounting systems as the company continues to grow. The company will continue to lease most of its company cars and its assorted offices across the UK ensuring that its fixed asset register remains very low.

We continue to maintain the local team spirit within every branch as this was a significant part of our development in the early years whilst, at the same time, also encouraging inter-branch visits to promote the ongoing inclusive non corporate family feel.

ON BEHALF OF THE BOARD:

M J Johnson - Director

3 May 2023

The director presents his report with the financial statements of the company for the year ended 31 August 2022.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of freight forwarding.

DIVIDENDS

No dividends will be distributed for the year ended 31 August 2022.

DIRECTOR

M J Johnson held office during the whole of the period from 1 September 2021 to the date of this report.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is 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 director is 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 him to ensure that the financial statements comply with the Companies Act 2006. He is 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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Walter Dawson & Son Chartered Accountants, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

M J Johnson - Director

3 May 2023

Opinion

We have audited the financial statements of QUALITY FREIGHT SERVICES LIMITED (the 'company') for the year ended 31 August 2022 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, 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).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 August 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 Auditors' 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 director's 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 director with respect to going concern are described in the relevant sections of this report.

Other information

The director is responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Director, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 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 the audit:

-	the information given in the Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements.

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 Report of the Director.

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:

-	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 director's remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page three, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Auditors' 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 a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach to identifying and assessing the risk 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 discussion with directors and other management, and form our commercial knowledge and experience of the sector;

- we focussed on specific laws and regulations which 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 a 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 overide of controls, we:

- performed analytical procedures to identify any unusual or unexpected relationships;

- tested journal entries to identify unusual transactions;

- assessed whether judgements and assumptions made in determining the accounting estimates set out in note 2 and where 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, relevant regulators including the Health and Safety Executive, 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 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 Report of the Auditors.

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 a Report of the Auditors 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.

John Richard Hall (Senior Statutory Auditor)

for and on behalf of Walter Dawson & Son Chartered Accountants

1 Valley Court

Canal Road

Bradford

West Yorkshire

BD1 4SP

3 May 2023

TURNOVER

73,743,077

35,052,020

Cost of sales

58,355,183

28,803,764

GROSS PROFIT

15,387,894

6,248,256

Administrative expenses

12,065,580

5,917,426

3,322,314

330,830

Other operating income

(22,793

)

22,146

OPERATING PROFIT

4

3,299,521

352,976

Interest receivable and similar income

544

18

3,300,065

352,994

Interest payable and similar expenses

5

20,197

15,416

PROFIT BEFORE TAXATION

3,279,868

337,578

Tax on profit

6

613,480

54,014

PROFIT FOR THE FINANCIAL YEAR

2,666,388

283,564

PROFIT FOR THE YEAR

2,666,388

283,564

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

2,666,388

283,564

FIXED ASSETS

Tangible assets

7

305,564

268,333

CURRENT ASSETS

Debtors

8

12,944,915

6,337,442

Cash at bank and in hand

2,814,933

1,518,054

15,759,848

7,855,496

CREDITORS

Amounts falling due within one year

9

11,918,320

6,643,125

NET CURRENT ASSETS

3,841,528

1,212,371

TOTAL ASSETS LESS CURRENT LIABILITIES

4,147,092

1,480,704

CAPITAL AND RESERVES

Called up share capital

11

2,000

2,000

Retained earnings

4,145,092

1,478,704

SHAREHOLDERS' FUNDS

4,147,092

1,480,704

The financial statements were approved by the director and authorised for issue on 3 May 2023 and were signed by:

M J Johnson - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 September 2020

1,100

1,195,140

1,196,240

Changes in equity

Issue of share capital

900

-

900

Total comprehensive income

-

283,564

283,564

Balance at 31 August 2021

2,000

1,478,704

1,480,704

Changes in equity

Total comprehensive income

-

2,666,388

2,666,388

Balance at 31 August 2022

2,000

4,145,092

4,147,092

Cash flows from operating activities

Cash generated from operations

1

1,532,024

1,001,407

Interest paid

(20,197

)

(14,698

)

Interest element of hire purchase or finance lease rental payments paid

-

(718

)

Tax paid

(54,015

)

(59,712

)

Net cash from operating activities

1,457,812

926,279

Cash flows from investing activities

Purchase of tangible fixed assets

(172,977

)

(124,001

)

Sale of tangible fixed assets

11,500

-

Interest received

544

18

Net cash from investing activities

(160,933

)

(123,983

)

Cash flows from financing activities

Loan repayments in year

-

(50,000

)

Capital repayments in year

-

(29,324

)

Share issue

-

900

Net cash from financing activities

-

(78,424

)

Increase in cash and cash equivalents

1,296,879

723,872

Cash and cash equivalents at beginning of year

2

1,518,054

794,182

Cash and cash equivalents at end of year

2

2,814,933

1,518,054

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

31.8.22

31.8.21

£

£

Profit before taxation

3,279,868

337,578

Depreciation charges

124,593

100,690

Profit on disposal of fixed assets

(346

)

-

Finance costs

20,197

15,416

Finance income

(544

)

(18

)

3,423,768

453,666

Increase in trade and other debtors

(6,607,473

)

(3,074,596

)

Increase in trade and other creditors

4,715,729

3,622,337

Cash generated from operations

1,532,024

1,001,407

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 August 2022

31.8.22

1.9.21

£

£

Cash and cash equivalents

2,814,933

1,518,054

Year ended 31 August 2021

31.8.21

1.9.20

£

£

Cash and cash equivalents

1,518,054

794,182

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.9.21

Cash flow

At 31.8.22

£

£

£

Net cash

Cash at bank and in hand

1,518,054

1,296,879

2,814,933

1,518,054

1,296,879

2,814,933

Total

1,518,054

1,296,879

2,814,933

1.	STATUTORY INFORMATION

QUALITY FREIGHT SERVICES LIMITED is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Fixtures and fittings

-

15% on reducing balance

Motor vehicles

-

25% on reducing balance

Computer equipment

-

33% on cost

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Income recognition

Income is recognised when services have been completed such that the risks and rewards of ownership have transferred to the customer.

3.	EMPLOYEES AND DIRECTORS

31.8.22

31.8.21

£

£

Wages and salaries

8,630,273

4,074,775

Social security costs

1,122,503

516,529

Other pension costs

153,340

175,317

9,906,116

4,766,621

The average number of employees during the year was as follows:

31.8.22

31.8.21

Directors

1

1

Employees

119

68

120

69

31.8.22

31.8.21

£

£

Director's remuneration

833,237

199,996

Information regarding the highest paid director for the year ended 31 August 2022 is as follows:

31.8.22

£

Emoluments etc

833,237

4.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

31.8.22

31.8.21

£

£

Depreciation - owned assets

124,591

92,271

Depreciation - assets on hire purchase contracts or finance leases

-

8,419

Profit on disposal of fixed assets

(346

)

-

Foreign exchange differences

(143,529

)

25,507

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

31.8.22

31.8.21

£

£

Bank charges & interest

20,147

14,510

Interest on taxation

50

188

Hire purchase

-

718

20,197

15,416

6.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

31.8.22

31.8.21

£

£

Current tax:

UK corporation tax

613,480

54,014

Tax on profit

613,480

54,014

UK corporation tax has been charged at 19% (2021 - 19%).

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

31.8.22

31.8.21

£

£

Profit before tax

3,279,868

337,578

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2021 - 19%)

623,175

64,140

Effects of:

Expenses not deductible for tax purposes

215

131

Income not taxable for tax purposes

(66

)

-

Capital allowances in excess of depreciation

(9,844

)

(10,257

)

Total tax charge

613,480

54,014

7.	TANGIBLE FIXED ASSETS

Fixtures

and

Motor

Computer

fittings

vehicles

equipment

Totals

£

£

£

£

COST

At 1 September 2021

168,257

79,821

364,051

612,129

Additions

48,566

60,876

63,535

172,977

Disposals

-

(39,349

)

-

(39,349

)

At 31 August 2022

216,823

101,348

427,586

745,757

DEPRECIATION

At 1 September 2021

71,999

54,563

217,234

343,796

Charge for year

21,723

16,847

86,021

124,591

Eliminated on disposal

-

(28,194

)

-

(28,194

)

At 31 August 2022

93,722

43,216

303,255

440,193

NET BOOK VALUE

At 31 August 2022

123,101

58,132

124,331

305,564

At 31 August 2021

96,258

25,258

146,817

268,333

8.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.8.22

31.8.21

£

£

Trade debtors

12,712,975

6,279,170

Other debtors

1,232

50,772

VAT

185,473

-

Prepayments

45,235

7,500

12,944,915

6,337,442

9.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.8.22

31.8.21

£

£

Trade creditors & accruals

10,451,756

6,311,975

Corporation Tax

613,480

54,014

Other taxes & PAYE

853,084

210,189

VAT

-

66,947

11,918,320

6,643,125

10.	LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:

31.8.22

31.8.21

£

£

Within one year

595,840

119,347

Between one and five years

543,197

456,153

1,139,037

575,500