QUALITY FREIGHT SERVICES LIMITED - Limited company accounts 23.2

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 2023

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 2023.

REVIEW OF BUSINESS

Major figures in the accounts remained steady during the financial year to 31 August 2023 as the business consolidated its growth.Our turnover has decreased by 7% , however the margin has increased by 1%. Both changes have been caused by several factors.

Firstly, we have been able to weed out business that was on the cusp of profitability. Secondly, we have continued to reinvest profits back into the business to allow continued recruitment of senior freight people. The third aspect, was two ventures during the year that failed to succeed and were subsequently closed down. One being an attempt to enter the Scottish market in a double pronged approach in Aberdeen & Glasgow which failed due to several senior people being employed who didn't live up to expectations. The other being a similar styled attempt to obtain a foothold in the UK domestic haulage business which initially started well and grew to 10 HGV's, but then sadly it became apparent that the margins were poor and costing controls were difficult to manage, resulting in costs potentially getting out of hand, at which point the decision was made to shut down the department and write down lease costs and driver redundancies.

A consequence of employing a dedicated Compliance Manager was the appreciation that having staff working continuously flat out was not sustainable, and therefore alongside employing more Freight Account Managers, a Management Accountant, a Recruitment manager and a payroll manager, we embarked on a recruitment drive to employ operational support staff to assist the higher flying Freight Account Managers to ensure we continued to operate our clients business precisely and successfully. This will also allow us to progress into the next year fully prepared to be able to kick-on and increase the business once again.

We have also continued the recruitment of professional freight forwarders as mentioned above, combined with increasing our network of offices across the country to 18, and this has again opened up new areas where the value of a local presence in the face of our competitors centralising has won us numerous customers who simply want professional attention and an appreciation of the nuances of their specific freight requirements. Future plans include a continuation of our recruitment policy of bringing in the best people and paying them well alongside new offices when the appropriately qualified candidates are found.

As in the previous year, we do not envisage any capital investment and we are currently exploring options such as the cloud etc rather than the purchase of more computers and other large IT items. We shall however continue with upgrading our bespoke operating and accounting systems as the company grows. The company will continue to lease most of its company cars and its assorted offices across the UK, making its fixed asset register extremely low again.

We are still maintaining the local team spirit within every branch, as this was a significant part of our development in the early years. Of course everyone appreciates the need to a centralised head office, and so we continue to encourage inter-branch visits to ensure internally the ongoing inclusive non corporate family feel.

The profits in the financial year to 31 August 2022 reflect a unique one-off for us in that several large contracts were obtained above and beyond our standards business that increased profits well above the norm. Conversely this financial year the costs and write offs have subdued our expected profits from an expected circa £ 1 million to their current position.

The core business does however remain strong, and we expect the next financial year to be back on track.

ON BEHALF OF THE BOARD:

M J Johnson - Director

20 May 2024

The director presents his report with the financial statements of the company for the year ended 31 August 2023.

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 2023.

DIRECTOR

M J Johnson held office during the whole of the period from 1 September 2022 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

20 May 2024

Opinion

We have audited the financial statements of QUALITY FREIGHT SERVICES LIMITED (the 'company') for the year ended 31 August 2023 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 2023 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

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.

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

20 May 2024

TURNOVER

68,619,287

73,743,077

Cost of sales

53,061,543

58,355,183

GROSS PROFIT

15,557,744

15,387,894

Administrative expenses

15,226,224

12,065,580

331,520

3,322,314

Other operating income

(7,666

)

(22,793

)

OPERATING PROFIT

4

323,854

3,299,521

Interest receivable and similar income

40,422

544

364,276

3,300,065

Interest payable and similar expenses

5

46,589

20,197

PROFIT BEFORE TAXATION

317,687

3,279,868

Tax on profit

6

131,796

613,480

PROFIT FOR THE FINANCIAL YEAR

185,891

2,666,388

PROFIT FOR THE YEAR

185,891

2,666,388

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

185,891

2,666,388

FIXED ASSETS

Tangible assets

7

277,416

305,564

CURRENT ASSETS

Debtors

8

8,450,573

12,944,915

Cash at bank

2,984,943

2,814,933

11,435,516

15,759,848

CREDITORS

Amounts falling due within one year

9

7,379,949

11,918,320

NET CURRENT ASSETS

4,055,567

3,841,528

TOTAL ASSETS LESS CURRENT LIABILITIES

4,332,983

4,147,092

CAPITAL AND RESERVES

Called up share capital

11

2,000

2,000

Retained earnings

4,330,983

4,145,092

SHAREHOLDERS' FUNDS

4,332,983

4,147,092

The financial statements were approved by the director and authorised for issue on 20 May 2024 and were signed by:

M J Johnson - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 September 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

Changes in equity

Total comprehensive income

-

185,891

185,891

Balance at 31 August 2023

2,000

4,330,983

4,332,983

Cash flows from operating activities

Cash generated from operations

1

1,081,353

1,532,024

Interest paid

(46,589

)

(20,197

)

Tax paid

(613,480

)

(54,015

)

Net cash from operating activities

421,284

1,457,812

Cash flows from investing activities

Purchase of tangible fixed assets

(121,444

)

(172,977

)

Sale of tangible fixed assets

11,000

11,500

Interest received

40,422

544

Net cash from investing activities

(70,022

)

(160,933

)

Cash flows from financing activities

Amount withdrawn by directors

(181,252

)

-

Net cash from financing activities

(181,252

)

-

Increase in cash and cash equivalents

170,010

1,296,879

Cash and cash equivalents at beginning of year

2

2,814,933

1,518,054

Cash and cash equivalents at end of year

2

2,984,943

2,814,933

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

31.8.23

31.8.22

£

£

Profit before taxation

317,687

3,279,868

Depreciation charges

139,551

124,593

Profit on disposal of fixed assets

(959

)

(346

)

Finance costs

46,589

20,197

Finance income

(40,422

)

(544

)

462,446

3,423,768

Decrease/(increase) in trade and other debtors

4,675,594

(6,607,473

)

(Decrease)/increase in trade and other creditors

(4,056,687

)

4,715,729

Cash generated from operations

1,081,353

1,532,024

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 2023

31.8.23

1.9.22

£

£

Cash and cash equivalents

2,984,943

2,814,933

Year ended 31 August 2022

31.8.22

1.9.21

£

£

Cash and cash equivalents

2,814,933

1,518,054

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.9.22

Cash flow

At 31.8.23

£

£

£

Net cash

Cash at bank and in hand

2,814,933

170,010

2,984,943

2,814,933

170,010

2,984,943

Total

2,814,933

170,010

2,984,943

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.

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

31.8.23

31.8.22

£

£

Wages and salaries

10,761,918

8,630,273

Social security costs

1,341,742

1,122,503

Other pension costs

187,189

153,340

12,290,849

9,906,116

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

31.8.23

31.8.22

Directors

1

1

Employees

170

119

171

120

31.8.23

31.8.22

£

£

Director's remuneration

207,331

833,237

Information regarding the highest paid director is as follows:

31.8.23

31.8.22

£

£

Emoluments etc

207,331

833,237

4.	OPERATING PROFIT

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

31.8.23

31.8.22

£

£

Depreciation - owned assets

139,551

124,591

Profit on disposal of fixed assets

(959

)

(346

)

Foreign exchange differences

2,968

(143,529

)

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

31.8.23

31.8.22

£

£

Bank charges & interest

46,589

20,147

Interest on taxation

-

50

46,589

20,197

6.

TAXATION

Analysis of the tax charge

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

31.8.23

31.8.22

£

£

Current tax:

UK corporation tax

131,796

613,480

Tax on profit

131,796

613,480

UK corporation tax has been charged at 21.52% (2022 - 19%).

Reconciliation of total tax charge included in profit and loss

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

31.8.23

31.8.22

£

£

Profit before tax

317,687

3,279,868

Profit multiplied by the standard rate of corporation tax in the UK of 21.515% (2022 - 19%)

68,350

623,175

Effects of:

Expenses not deductible for tax purposes

8,715

215

Income not taxable for tax purposes

(206

)

(66

)

Capital allowances in excess of depreciation

(6,236

)

(9,844

)

Tax payable under S455 CTA 2010

61,173

-

Total tax charge

131,796

613,480

7.	TANGIBLE FIXED ASSETS

Fixtures

and

Motor

Computer

fittings

vehicles

equipment

Totals

£

£

£

£

COST

At 1 September 2022

216,823

101,348

427,586

745,757

Additions

31,982

-

89,462

121,444

Disposals

-

(14,945

)

-

(14,945

)

At 31 August 2023

248,805

86,403

517,048

852,256

DEPRECIATION

At 1 September 2022

93,722

43,216

303,255

440,193

Charge for year

23,262

12,899

103,390

139,551

Eliminated on disposal

-

(4,904

)

-

(4,904

)

At 31 August 2023

116,984

51,211

406,645

574,840

NET BOOK VALUE

At 31 August 2023

131,821

35,192

110,403

277,416

At 31 August 2022

123,101

58,132

124,331

305,564

8.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.8.23

31.8.22

£

£

Trade debtors

7,950,434

12,712,975

Other debtors

7,225

1,232

Directors' current accounts

181,252

-

VAT

115,287

185,473

Prepayments

196,375

45,235

8,450,573

12,944,915

9.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.8.23

31.8.22

£

£

Trade creditors & accruals

6,998,215

10,451,756

Corporation Tax

131,796

613,480

Other taxes & PAYE

249,938

853,084

7,379,949

11,918,320

10.	LEASING AGREEMENTS

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

31.8.23

31.8.22

£

£

Within one year

653,259

595,840

Between one and five years

597,927

543,197

1,251,186

1,139,037

11.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

31.8.23

31.8.22

value:

£

£

1,000

Ordinary

£1.00

1,000

1,000

1,000

Ordinary non-voting

£1.00

1,000

1,000

2,000

2,000

12.	PENSION COMMITMENTS

The company operates a defined contribution pension scheme, the assets of which are held separately from those of the company in an independently administered fund. The pension cost charge in the accounts amounted to £187,189 (2022 : £153,340).