Company registration number 00669227 (England and Wales)
WEST MIDLAND MERCHANTS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
WEST MIDLAND MERCHANTS LIMITED
COMPANY INFORMATION
Directors
A H Higgs
A S D Higgs
P J Higgs
P J Higgs
R A Wylie
Secretary
Mr R A Wylie
Company number
00669227
Registered office
Churchfield House
36 Vicar Street
Dudley
West Midlands
England
DY2 8RG
Auditor
BK Plus Audit Limited
Churchfield House
36 Vicar Street
Dudley
West Midlands
United Kingdom
DY2 8RG
Business address
Brinton House
Exchange Street
Kidderminster
Worcestershire
DY10 1BT
WEST MIDLAND MERCHANTS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 20
WEST MIDLAND MERCHANTS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -

The directors present the strategic report for the year ended 31 March 2023.

Review of the business

The company is primarily focused on the retail jewellery trade selling a range of branded and own brand watches and jewellery.

 

Company sales have rebounded strongly in the current period following disruption caused by covid related restrictions.

 

The results for the year and the financial position at the yearend were considered satisfactory by the directors who expect continued growth for the foreseeable future.

Principal risks and uncertainties

The directors evaluate the main risks facing the company in monthly board meetings and weekly management meetings. In addition, measures are in place to manage and address risks on a daily basis through the policies and procedures implemented by the company.

 

The principal risks and uncertainties facing the company are broadly grouped as: operational, competitive and financial.

 

Operational and Competitive Risks

 

The company operates in both the high street retail arena and over the internet. The company is exposed to macroeconomic risks that have an impact on consumers’ disposable income and on fashion and brand trends in the retail jewellery market. The company is also exposed to competitive risks from a number of other jewellery retailers. The directors regularly monitor the performance of individual stores and take appropriate actions where necessary. They also closely monitor buying trends across the company in conjunction with key suppliers to ensure appropriate product ranges are carried.

 

The success of the company is very dependent upon the recruitment and retention of good quality and the directors seek to make the company an employer of choice in its sector.

 

The company has developed and maintains strong relationships with all key stakeholders such as suppliers and finance providers to provide a strong base for the operational activities of the company.

 

Financial Risks

 

The company has established a financial reporting and control framework with the primary objective of protecting the company from events that hinder the achievement of the company’s performance objective.

 

The company has minimal credit exposures as the significant majority of sales are paid for at the point of sale.

 

The company uses Barclays Bank PLC, a major UK clearing bank, and therefore liquidity risk is considered low. The company has strong relationships with Barclays Bank PLC and has in place appropriate banking facilities.

Development and performance

The directors expect the company to continue to grow despite difficult market conditions and economic uncertainty. Continued review of overheads is an important factor in maintaining the profitability of the company and ensuring that it operates efficiently and effectively within a well-controlled cost base.

Key performance indicators

The directors expect the company to continue to grow despite difficult market conditions and economic uncertainty. Continued review of overheads is an important factor in maintaining the profitability of the company and ensuring that it operates efficiently and effectively within a well-controlled cost base.

WEST MIDLAND MERCHANTS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
Other performance indicators

The directors use key performance indicators such as performance ratios, amongst others, in order to ensure the business is operating efficiently. They consider that the key financial indicators are turnover, gross profit margin and profit before taxation.

 

There was an decrease in turnover of 32.9% (2022 - increase 30.5%), falling from £16.4m in 2022 to £11m in 2023.

 

The gross profit increased by 39.4% (2022 - increased by 3.5%) compared to the results of the previous year, increasing from £943.6k in 2022 to £1,3m in 2023. Gross profit margin increased from 5.8% in 2022 to 12% in 2023.

 

The profit before tax has decreased from £288.8k (1.8% of turnover) in 2022 to £49K (0.5% of turnover) in 2023.

On behalf of the board

A H Higgs
Director
25 March 2024
WEST MIDLAND MERCHANTS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 March 2023.

Principal activities

The principal activity of the company continued to be that of wholesaling of jewellery.

Results and dividends

The results for the year are set out on page 8.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

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

A H Higgs
A S D Higgs
P J Higgs
P J Higgs
R A Wylie
Auditor

In accordance with the company's articles, a resolution proposing that BK Plus Audit Limited be reappointed as auditor of the company will be put at a General Meeting.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
A H Higgs
Director
25 March 2024
WEST MIDLAND MERCHANTS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
- 4 -

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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:

 

 

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

WEST MIDLAND MERCHANTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF WEST MIDLAND MERCHANTS LIMITED
- 5 -
Opinion

We have audited the financial statements of West Midland Merchants Limited (the 'company') for the year ended 31 March 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

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

Conclusions relating to going concern

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

 

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

 

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

Other information

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

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

WEST MIDLAND MERCHANTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF WEST MIDLAND MERCHANTS LIMITED
- 6 -
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:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

 

From the preliminary of the audit, we ensure our understanding of the entity is up to date. This includes, but is not limited to, current knowledge of their activities, the business and control environments, and their compliance with the applicable legal and regulatory frameworks. This information supports our risk identification and the subsequent design of audit procedures to mitigate those risks; ensuring that the audit evidence obtained is sufficient and appropriate to support our opinion.

 

In response to the risks identified, specific to this entity, we designed procedures which included, but were not limited to:

 

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

WEST MIDLAND MERCHANTS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF WEST MIDLAND MERCHANTS LIMITED
- 7 -

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Christopher Hession C.A. (Senior Statutory Auditor)
For and on behalf of BK Plus Audit Limited
25 March 2024
Statutory Auditor
Churchfield House
36 Vicar Street
Dudley
West Midlands
United Kingdom
DY2 8RG
WEST MIDLAND MERCHANTS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
10,985,431
16,380,741
Cost of sales
(9,670,146)
(15,437,215)
Gross profit
1,315,285
943,526
Administrative expenses
(1,265,908)
(668,510)
Other operating income
-
0
13,751
Operating profit
4
49,377
288,767
Interest receivable and similar income
6
1
26
Profit before taxation
49,378
288,793
Tax on profit
7
-
0
(55,048)
Profit for the financial year
49,378
233,745

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

WEST MIDLAND MERCHANTS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 9 -
2023
2022
£
£
Profit for the year
49,378
233,745
Other comprehensive income
-
-
Total comprehensive income for the year
49,378
233,745
WEST MIDLAND MERCHANTS LIMITED
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 10 -
2023
2022
Notes
£
£
£
£
Current assets
Stocks
9
899,342
944,025
Debtors
10
11,172,227
10,201,887
Cash at bank and in hand
38,154
343,265
12,109,723
11,489,177
Creditors: amounts falling due within one year
11
(10,569,855)
(9,998,687)
Net current assets
1,539,868
1,490,490
Capital and reserves
Called up share capital
13
25,000
25,000
Share premium account
16,384
16,384
Capital redemption reserve
3,163
3,163
Profit and loss reserves
1,495,321
1,445,943
Total equity
1,539,868
1,490,490
The financial statements were approved by the board of directors and authorised for issue on 25 March 2024 and are signed on its behalf by:
A H Higgs
Director
Company Registration No. 00669227
WEST MIDLAND MERCHANTS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 11 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 April 2021
25,000
16,384
3,163
1,212,198
1,256,745
Year ended 31 March 2022:
Profit and total comprehensive income for the year
-
-
-
233,745
233,745
Balance at 31 March 2022
25,000
16,384
3,163
1,445,943
1,490,490
Year ended 31 March 2023:
Profit and total comprehensive income for the year
-
-
-
49,378
49,378
Balance at 31 March 2023
25,000
16,384
3,163
1,495,321
1,539,868
WEST MIDLAND MERCHANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 12 -
1
Accounting policies
Company information

West Midland Merchants Limited is a private company limited by shares incorporated in England and Wales. The registered office is Churchfield House, 36 Vicar Street, Dudley, West Midlands, England, DY2 8RG. The principal place of business is Brinton House, Exchange Street, Kidderminster, Worcestershire, DY10 1BT.

1.1
Accounting convention

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

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

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

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of T H Baker Group Limited. These consolidated financial statements are available from its registered office, Churchfield House, 36 Vicar Street, Dudley, West Midlands, DY2 8RG.

1.2
Going concern

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

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

WEST MIDLAND MERCHANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 13 -

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Fixtures and fittings
20% on cost and 15% on reducing balance

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.5
Stocks

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

 

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

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Change in accounting estimate

 

During the year the directors undertook a review of the stock provision and due to the value of stock being driven by gold and diamond prices have updated the provision for stock older than 48 days.

 

The impact in the accounts for the year ended 31/03/2023 is an increase in stock of £8,820.

1.6
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand.

1.7
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally 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.

WEST MIDLAND MERCHANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 14 -
Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

WEST MIDLAND MERCHANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.8
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.9
Taxation

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

Current tax

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

Deferred tax

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

 

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

WEST MIDLAND MERCHANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 16 -
1.10
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.11
Retirement benefits

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

1.12
Government grants

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

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

1.13
Foreign exchange

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

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Stock provisions

The company considers it necessary to evaluate the recoverability of the cost of stock. The stock levels are constantly reviewed and, should there be an indication of obsolescence, the stock is written down to its assessed net realisable value.

3
Turnover and other revenue
WEST MIDLAND MERCHANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
3
Turnover and other revenue
(Continued)
- 17 -
2023
2022
£
£
Other revenue
Interest income
1
26
Grants received
-
13,751
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
-
(13,751)
Fees payable to the company's auditor for the audit of the company's financial statements
9,655
9,055
Depreciation of owned tangible fixed assets
-
934
5
Employees

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

2023
2022
Number
Number
Management
1
1
Office, Admin and Stock control
28
29
Total
29
30

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
546,475
553,424
Social security costs
41,790
41,751
Pension costs
48,748
46,807
637,013
641,982
6
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
1
26
WEST MIDLAND MERCHANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 18 -
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
0
55,048

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
49,378
288,793
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
9,382
54,871
Tax effect of expenses that are not deductible in determining taxable profit
-
0
177
Group relief
(9,382)
-
0
Taxation charge for the year
-
55,048
8
Tangible fixed assets
Fixtures and fittings
£
Cost
At 1 April 2022 and 31 March 2023
16,432
Depreciation and impairment
At 1 April 2022 and 31 March 2023
16,432
Carrying amount
At 31 March 2023
-
0
At 31 March 2022
-
0
9
Stocks
2023
2022
£
£
Finished goods and goods for resale
899,342
944,025

There is no significant difference between the replacement cost of the stock and its carrying amount.

 

All of the company's stock has been pledged as security for the bank loans payable by the group.

WEST MIDLAND MERCHANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 19 -
10
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
12,996
1,343,926
Amounts owed by group undertakings
10,956,228
8,815,076
Other debtors
203,003
42,885
11,172,227
10,201,887
11
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
1,202,473
1,429,165
Amounts owed to group undertakings
9,352,269
8,476,042
Corporation tax
-
0
55,048
Accruals and deferred income
15,113
38,432
10,569,855
9,998,687

Barclays Bank plc hold a fixed charge over all book and other debts, goodwill, uncalled capital and intellectual property rights and a first floating charge over all assets and undertakings, both present and future.

 

Cross Guarantee and Debenture have been given by and between T H Baker Group Limited, T H Baker Holdings Limited, T H Baker & Co (Established 1888) Limited, T H Baker Limited, West Midland Merchants Limited, Creedpoint Limited, T H Baker Goldsmiths Limited and T H Baker (Management Services) Limited to secure all liabilities.

 

12
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
48,748
46,807

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

13
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Ordinary Shares of £1 each
25,000
25,000
25,000
25,000
WEST MIDLAND MERCHANTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 20 -
14
Ultimate controlling party

The company is a wholly owned subsidiary of T H Baker Group Limited (company No. 6217948). The ultimate controlling company is T H Baker Global Incorporated Limited registered office address Churchfield House, 36 Vicar Street, Dudley, West Midlands, DY2 8RG.

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