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Registered number: 03403572










MIDLAND MARKETING (UK) LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 28 FEBRUARY 2023

 
MIDLAND MARKETING (UK) LIMITED
 
 
COMPANY INFORMATION


Directors
Mr N D Thakkar 
Mr R Vithlani 




Company secretary
Mr N D Thakkar



Registered number
03403572



Registered office
Unit 59 The Warren
East Goscote Industrial Estate, East Goscote

Leicester

LE7 3XA




Independent auditors
MHA
Chartered Accountants & Statutory Auditors

11 Merus Court

Meridian Business Park

Leicester

LE19 1RJ





 
MIDLAND MARKETING (UK) LIMITED
 

CONTENTS



Page
Strategic Report
 
1 - 2
Directors' Report
 
3 - 4
Directors' Responsibilities Statement
 
5
Independent Auditors' Report
 
6 - 9
Statement of Comprehensive Income
 
10
Balance Sheet
 
11
Statement of Changes in Equity
 
12
Statement of Cash Flows
 
13
Analysis of Net Debt
 
14
Notes to the Financial Statements
 
15 - 28

 
MIDLAND MARKETING (UK) LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2023

Introduction
 
The directors present their Strategic Report on the Company for the year ended 28 February 2023.

Business review
 
The principal activity of the Company during the year was the wholesale of household goods.
Results and performance
The results for the Company, as set out on page 10 show a profit on ordinary activities before tax of £1,364,544 (2022 - £1,625,021). The shareholder’s funds total £5,677,964 (2022 -  £5,175,131).  
Business environment
The UK discount sector continues to be a highly competitive environment. With retailers seeking to reduce the end price of goods for their customers, Midland Marketing (UK) Limited is an ideal fit for many competitive companies looking to optimise their product offerings with a wholesaler that repeatedly delivers on all levels.
We are not complacent and realise that competition is severe and with some fantastic wholesalers in the market place, Midland Marketing (UK) Limited is continually striving to stay ahead and update its skills, that go beyond just the supply of products.
Strategy
The Company’s success is dependent on the proper selection, pricing and management of the orders it accepts. We believe that it is important to maintain a diversified portfolio of clients, in order to achieve maximum profitability and reduce risk.  
The Company continues to place a greater emphasis on partnering with like-minded businesses in order to ensure that it continues to offer the highest level of service, and is continually assessing its external suppliers to ensure that they meet the Company’s standards.
The Company recognises that it is as good as the people that it employs and is continually looking to ensure that it employs the best people across its business. We continue to report very low staff turnover, with most people having worked with the Company in excess of ten years.  This ensures that when you are dealing with a member of our team, you can be confident that they understand our business and have many years of experience in dealing with first rate delivery.
In recent years we invested in additional sales representatives to grow the smaller retail side of the business. Post year end, due to transactional strength and good terms with suppliers the Company has transitioned away from the retail side of the business, concentrating on volume sales at lower margins. The customers we deal with have grown with us and we have great business relationships with them.

Principal risks and uncertainties
 
The management of the business and the execution of the Company's strategy are subject to a number of risks.
Legislative risk
The directors remain alert to the impact of legislative changes on the Company's operations. The directors seek relevant expert advice where necessary to mitigate the impact on the business. 
Other key business risks and uncertainties are identified as being competition from competitors and maintaining the gross margin. 

Page 1

 
MIDLAND MARKETING (UK) LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023

Financial key performance indicators
 
Given the straightforward nature of the business, the Company's directors review the Statement of Comprehensive Income and Balance Sheet on a monthly basis, together with a detailed summary of individual order performance.
These reports enable the directors to fully understand the Company's performance and the position of the business.


This report was approved by the board and signed on its behalf.



................................................
Mr N D Thakkar
Director

Date: 2 February 2024
Page 2

 
MIDLAND MARKETING (UK) LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2023

The directors present their report and the financial statements for the year ended 28 February 2023.

Results and dividends

The profit for the year, after taxation, amounted to £1,102,833 (2022 - £1,215,802).

During the year dividends amounting to £600,000 (2022 - £660,000) were recommended by the directors.

Directors

The directors who served during the year were:

Mr N D Thakkar 
Mr R Vithlani 

Future developments

Going forward the directors are aiming to grow the Company whilst keeping a tight control over the cost base. The directors are diversifying the Company's customers by supplying to a wider range of smaller retailers in order to reduce risk. 

Financial instruments

Financial risk management objectives and policies
The Company's principal financial instruments comprise of cash, the main purpose of which is to provide finance for its normal trading operations and for future investment. The Company has various other financial instruments such as trade debtors and creditors that arise directly from its trading operations. The main risks arising from the Company's financial instruments are price, liquidity and credit risks. The Company has clear policies for managing each of these risks, as summarised below.
Price risk
The Company sources its products from a number of suppliers and is exposed to changes in the market prices of its commodities as well as fluctuating exchange rates. To mitigate increases in prices, the Company continues to source its products from a number of different suppliers and periodically reviews its agreements with suppliers to ensure these are on commercially favourable terms.
Liquidity risk
The Company aims to mitigate liquidity risk by managing cash generation by its operations and applying debtor collection targets.
Credit risk
The risk of financial loss due to a counterparty’s failure to honour its obligations arises principally in relation to transactions where the Company provides goods or services on deferred credit terms. Company policies are aimed at minimising such losses, and require that deferred terms are granted only to customers who demonstrate an appropriate payment history and satisfy creditworthiness procedures. Individual exposures are monitored with customers subject to credit limits to ensure that the Company's exposure to bad debts is not significant.

Page 3

 
MIDLAND MARKETING (UK) LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Independent Auditors

Following a rebranding exercise on 15 May 2023, the trading name of the Company's independent auditor changed from MHA MacIntyre Hudson to MHA. The auditors, MHA, 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.
 





................................................
Mr N D Thakkar
Director

Date: 2 February 2024
Page 4

 
MIDLAND MARKETING (UK) LIMITED
 
 
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 28 FEBRUARY 2023

The directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent; and


prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company 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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Page 5

 
MIDLAND MARKETING (UK) LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MIDLAND MARKETING (UK) LIMITED
 

Opinion


We have audited the financial statements of Midland Marketing (UK) Limited (the 'Company') for the year ended 28 February 2023, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe 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 28 February 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 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.


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.


Page 6

 
MIDLAND MARKETING (UK) LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MIDLAND MARKETING (UK) LIMITED (CONTINUED)


Other information


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.


Opinion 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 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.


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 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 directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 5, 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.


Page 7

 
MIDLAND MARKETING (UK) LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MIDLAND MARKETING (UK) LIMITED (CONTINUED)


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 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 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:
 
Enquiry of management and those charged with governance around actual, potential or suspected litigation, claims, non-compliance with applicable laws and regulations and fraud.
Enquiry of entity staff in tax and compliance functions and external advisors to identify any instances of non-compliance with laws and regulations.
Performing audit work over the risk of management override, including testing of journal entries and other  adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias.
Reviewing of financial statements disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
Discussions amongst the engagement team in relation to how and where fraud might occur in the financial statements and any potential indicators of fraud.



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.
Page 8

 
MIDLAND MARKETING (UK) LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MIDLAND MARKETING (UK) LIMITED (CONTINUED)


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 2006Our 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.





Shelley Harvey FCCA (Senior Statutory Auditor)
  
for and on behalf of MHA, Statutory Auditor
Leicester, United Kingdom
 
Date:
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313).
  

2 February 2024
Page 9

 
MIDLAND MARKETING (UK) LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 28 FEBRUARY 2023

2023
2022
Note
£
£

  

Turnover
 4 
13,461,808
20,194,327

Cost of sales
  
(11,618,672)
(17,799,619)

Gross profit
  
1,843,136
2,394,708

Administrative expenses
  
(478,592)
(769,680)

Operating profit
 5 
1,364,544
1,625,028

Interest receivable and similar income
 9 
-
4

Interest payable and similar expenses
 10 
-
(11)

Profit before tax
  
1,364,544
1,625,021

Tax on profit
 11 
(261,711)
(409,219)

Profit for the financial year
  
1,102,833
1,215,802

There were no recognised gains and losses for 2023 or 2022 other than those included in the Statement of Comprehensive Income.

There was no other comprehensive income for 2023 (2022 - £Nil).

The notes on pages 15 to 28 form part of these financial statements.
Page 10

 
MIDLAND MARKETING (UK) LIMITED
REGISTERED NUMBER: 03403572

BALANCE SHEET
AS AT 28 FEBRUARY 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 13 
-
-

Tangible assets
 14 
14,410
20,866

  
14,410
20,866

Current assets
  

Stocks
 15 
1,744,565
2,249,985

Debtors: amounts falling due within one year
 16 
1,450,622
2,605,593

Cash at bank and in hand
 17 
4,613,712
4,343,791

  
7,808,899
9,199,369

Creditors: amounts falling due within one year
 18 
(2,145,245)
(4,045,004)

Net current assets
  
 
 
5,663,654
 
 
5,154,365

Total assets less current liabilities
  
5,678,064
5,175,231

  

Net assets
  
5,678,064
5,175,231


Capital and reserves
  

Called up share capital 
 19 
100
100

Profit and loss account
  
5,677,964
5,175,131

  
5,678,064
5,175,231


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




................................................
Mr N D Thakkar
Director

Date: 2 February 2024

The notes on pages 15 to 28 form part of these financial statements.
Page 11

 
MIDLAND MARKETING (UK) LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 28 FEBRUARY 2023


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 March 2021
100
4,619,329
4,619,429


Comprehensive income for the year

Profit for the year
-
1,215,802
1,215,802

Dividends
-
(660,000)
(660,000)



At 1 March 2022
100
5,175,131
5,175,231


Comprehensive income for the year

Profit for the year
-
1,102,833
1,102,833

Dividends
-
(600,000)
(600,000)


At 28 February 2023
100
5,677,964
5,678,064


The notes on pages 15 to 28 form part of these financial statements.

Profit and Loss account
Includes all current and prior period retained profits and losses. All amounts are distributable.
Page 12

 
MIDLAND MARKETING (UK) LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 28 FEBRUARY 2023

2023
2022
£
£

Cash flows from operating activities

Profit for the financial year
1,102,833
1,215,802

Adjustments for:

Depreciation of tangible assets
8,637
9,755

Interest paid
-
11

Interest received
-
(4)

Taxation charge
261,711
409,219

Decrease in stocks
505,420
489,032

Decrease in debtors
1,154,971
578,680

(Decrease)/increase in creditors
(1,430,191)
210,676

Decrease in amounts owed to participating interests
(311,396)
(161,929)

Corporation tax paid
(419,883)
(335,337)

Net cash generated from operating activities

872,102
2,415,905


Cash flows from investing activities

Purchase of tangible fixed assets
(2,181)
(13,037)

Interest received
-
4

Net cash from investing activities

(2,181)
(13,033)

Cash flows from financing activities

Dividends paid
(600,000)
(600,000)

Interest paid
-
(11)

Net cash used in financing activities
(600,000)
(600,011)

Net increase in cash and cash equivalents
269,921
1,802,861

Cash and cash equivalents at beginning of year
4,343,791
2,540,930

Cash and cash equivalents at the end of year
4,613,712
4,343,791


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
4,613,712
4,343,791

4,613,712
4,343,791


The notes on pages 15 to 28 form part of these financial statements.

Page 13

 
MIDLAND MARKETING (UK) LIMITED
 

ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 28 FEBRUARY 2023




At 1 March 2022
Cash flows
At 28 February 2023
£

£

£

Cash at bank and in hand

4,343,791

269,921

4,613,712

Debt due within 1 year

(38,166)

25,912

(12,254)


4,305,625
295,833
4,601,458

The notes on pages 15 to 28 form part of these financial statements.
Page 14

 
MIDLAND MARKETING (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

1.


General information

The entity is a private company limited by shares, which is incorporated in England and Wales, registration number 03403572. The registered office is Unit 59 The Warren, East Goscote Industrial Estate, East Goscote, Leicester, LE7 3XA.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).

The Company holds adequate cash and working capital that will allow the Company to continue in operational existence for the foreseeable future. The Company therefore continues to adopt the going concern basis in preparing its financial information and the directors believe the Company has the ability to continue as a going concern for at least 12 months from the approval of the financial statements. 

The following principal accounting policies have been applied:

 
2.2

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is British Pound Sterling (£).

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Page 15

 
MIDLAND MARKETING (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

2.Accounting policies (continued)

 
2.3

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Company has transferred the significant risks and rewards of ownership to the buyer;
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

 
2.4

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to the Statement of Comprehensive Income on a straight-line basis over the lease term.

 
2.5

Interest income

Interest income is recognised in the Statement of Comprehensive Income using the effective interest method.

 
2.6

Finance costs

Finance costs are charged to the Statement of Comprehensive Income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.7

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

Page 16

 
MIDLAND MARKETING (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

2.Accounting policies (continued)

 
2.8

Taxation

Tax is recognised in the Statement of Comprehensive Income except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

 
2.9

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 
2.10

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

The Company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to the Statement of Comprehensive Income during the period in which they are incurred.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.

Depreciation is provided on the following basis:

Plant and machinery
-
20%
on cost per annum
Fixtures and fittings
-
40%
on reducing balance per annum

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Comprehensive Income.

Page 17

 
MIDLAND MARKETING (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

2.Accounting policies (continued)

 
2.11

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Statement of Comprehensive Income.

 
2.12

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at transaction price, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.13

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.14

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at transaction price, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.15

Financial instruments


The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at transaction price, net of transaction cost, and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income.

 
Page 18

 
MIDLAND MARKETING (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

2.Accounting policies (continued)


2.15
Financial instruments (continued)

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the balance sheet date.
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

 
2.16

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.
(i) Stock provision
Stock is acquired and held on a speculative basis, based on the expectation of the directors of likely future demand and an assessment of the profitability of each product line. It is an inherent feature of the industry, in which the Company operates, that both the purchase and selling prices of the goods will fluctuate to reflect demand, competitive trends and the seasonality of certain goods.
The directors will make a regular assessment of the stock held and its likely selling price. Based on this assessment they will provide against the cost of the stock, to write it down to its net realisable value where this is deemed necessary.
(ii) Useful economic lives of tangible assets
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are reassessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.

Page 19

 
MIDLAND MARKETING (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

4.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Wholesale of household goods
13,461,808
20,194,327

13,461,808
20,194,327


Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
12,794,714
19,288,990

Rest of the world
667,094
905,337

13,461,808
20,194,327



5.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Depreciation
8,637
9,755

Other operating lease rentals
100,078
123,886

Defined contribution pension costs
81,862
82,125
Page 20

 
MIDLAND MARKETING (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

6.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors:


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
18,000
13,500


Fees payable to the Company's auditors in respect of:


Taxation compliance services
1,500
1,000

All other services
4,993
3,599

6,493
4,599








7.


Employees

Staff costs, including directors' remuneration, were as follows:


2023
2022
£
£

Wages and salaries
137,396
141,442

Social security costs
9,565
9,743

Cost of defined contribution scheme
81,862
82,125

228,823
233,310


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Distribution staff
3
4



Management staff
2
2



Administrative staff
3
3

8
9

Page 21

 
MIDLAND MARKETING (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

8.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
28,800
28,800

Company contributions to defined contribution pension schemes
80,000
80,000

108,800
108,800


During the year retirement benefits were accruing to 2 directors (2022 - 2) in respect of defined contribution pension schemes.


9.


Interest receivable

2023
2022
£
£


Other interest receivable
-
4

-
4


10.


Interest payable and similar expenses

2023
2022
£
£


Other interest payable
-
11

-
11
Page 22

 
MIDLAND MARKETING (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

11.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
261,711
306,492

Adjustments in respect of previous periods
-
102,727


Total current tax
261,711
409,219


Tax on profit
261,711
409,219

Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 19% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
1,364,544
1,625,021


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2022 - 19%)
259,263
308,754

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
1,346
1,851

Depreciation for the year in excess of capital allowances
1,102
(624)

Adjustments to tax charge in respect of prior periods
-
102,727

Other differences leading to an decrease in the tax charge
-
(3,489)

Total tax charge for the year
261,711
409,219


Factors that may affect future tax charges

From 1 April 2023, the Corporation Tax main rate will increase to 25% for profits over £250,000. A small profits rate will also be introduced for profits of £50,000 or less, charging Corporation Tax at 19%. Profits between £50,000 and £250,000 will be taxed at the main rate reduced by a marginal relief providing a gradual increase in the effective Corporation Tax rate.

Page 23

 
MIDLAND MARKETING (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

12.


Dividends

2023
2022
£
£


Dividends
600,000
660,000

600,000
660,000


13.


Intangible assets




Goodwill

£



Cost


At 1 March 2022
28,000



At 28 February 2023

28,000



Amortisation


At 1 March 2022
28,000



At 28 February 2023

28,000



Net book value



At 28 February 2023
-



At 28 February 2022
-



Page 24

 
MIDLAND MARKETING (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

14.


Tangible fixed assets





Plant and machinery
Fixtures and fittings
Total

£
£
£



Cost or valuation


At 1 March 2022
25,543
74,424
99,967


Additions
-
2,181
2,181



At 28 February 2023

25,543
76,605
102,148



Depreciation


At 1 March 2022
25,543
53,558
79,101


Charge for the year on owned assets
-
8,637
8,637



At 28 February 2023

25,543
62,195
87,738



Net book value



At 28 February 2023
-
14,410
14,410



At 28 February 2022
-
20,866
20,866


15.


Stocks

2023
2022
£
£

Finished goods and goods for resale
1,744,565
2,249,985

1,744,565
2,249,985


The carrying value of stocks are stated net of impairment losses totalling £Nil (2022 - £60,780). Impairment profit totalling £60,780 (2022 - £626,239) were recognised in the Statement of Comprehensive Income.
Included in the stock value of £1,744,565 (2022 - £2,249,985) is £Nil (2022 - £56,602) of consignment stock.

Page 25

 
MIDLAND MARKETING (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

16.


Debtors

2023
2022
£
£


Trade debtors
1,372,887
2,601,003

Other debtors
73,145
-

Prepayments and accrued income
4,590
4,590

1,450,622
2,605,593



17.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
4,613,712
4,343,791

4,613,712
4,343,791



18.


Creditors: Amounts falling due within one year

2023
2022
£
£

Trade creditors
939,029
2,288,968

Amounts owed to other participating interests
909,451
1,220,847

Corporation tax
254,536
412,708

Other taxation and social security
5,170
59,510

Other creditors
12,254
38,166

Accruals and deferred income
24,805
24,805

2,145,245
4,045,004


Santander UK PLC held a debenture dated 30 March 2021 over all of the property and assets of the Company. This charge was outstanding as at 28 February 2023. 

Page 26

 
MIDLAND MARKETING (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

19.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



100 (2022 - 100) Ordinary shares of £1.00 each
100
100

Each ordinary share has equal voting and distribution rights, including repayment of capital in the event of winding up.



20.


Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £81,862 (2022 - £82,125). Contributions totalling £Nil (2022 - £Nil) were payable to the fund at the balance sheet date.


21.


Commitments under operating leases

At 28 February 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
45,983
35,770

Later than 1 year and not later than 5 years
22,356
58,126

68,339
93,896


22.


Related party transactions

Dividends were paid by the Company and received in a beneficial capacity by:


2023
2022
£
£

Dividends to key management personnel
300,000
330,000
Dividends to other related parties
300,000
330,000
Amounts owed to key management personnel
12,254
38,166
Amounts owed by key management personnel
6,196
-
Remuneration paid to key management personnel
110,323
110,335
Purchases from related party companies
2,141,847
1,913,910
Amounts owed to related party companies
909,451
1,220,847

All amounts are interest free and repayable on demand.

Page 27

 
MIDLAND MARKETING (UK) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023

23.


Controlling party

The Company was under the control of Mr N D Thakkar and Mr R Vithlani throughout the current and previous year. Mr N D Thakkar and Mr R Vithlani are directors and shareholders in the Company.

 
Page 28