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Registered number: 09648525









MERCANTILE & MARITIME UK LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

 
MERCANTILE & MARITIME UK LIMITED
 
 
COMPANY INFORMATION


Directors
Eleni Fergadi 
Murtaza Lakhani 




Company secretary
Oakwood Corporate Secretary Limited



Registered number
09648525



Registered office
1 Ashley Road
Altrincham

Cheshire

United Kingdom

WA14 2DT




Independent auditors
Barnes Roffe LLP
Chartered Accountants & Statutory Auditor

Leytonstone House

Leytonstone

London

E11 1GA





 
MERCANTILE & MARITIME UK LIMITED
 

CONTENTS



Page
Strategic report
 
1
Directors' report
 
2 - 3
Independent auditors' report
 
4 - 6
Statement of comprehensive income
 
7
Balance sheet
 
8
Statement of changes in equity
 
9
Statement of cash flows
 
10
Analysis of net debt
 
11
Notes to the financial statements
 
12 - 25

 
MERCANTILE & MARITIME UK LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

Introduction
 
Mercantile & Maritime UK Limited’s ("the Company") principal activities continue to be that of the provision of a range of logistical and technical support, general business consultancy services and administrative support.

Business review
 
We continue with our commitment to work according to prudent principles for the long-term benefit of shareholders, employees and clients alike. This allows us to invest further in the Company's resources to underpin profitable growth based on sound planning. 
The directors  are  satisfied  with  the  performance  of  the  Company.  Turnover has decreased  by 30%  to £9,763,447 
(2021 - £12,663,940). The Company continues to ensure that it conforms to consistently high standards of service delivery. Further performance indicators can be found on the statement of comprehensive income.
The Company considers its key performance indicators to be its gross profit, operating profit and net assets.

Financial risk management policy
 
The Company's financial instruments comprise cash, trade debtors and creditors, plus certain other debtors and creditors. The main risks associated with these financial assets and liabilities are set out below.

Credit risk
 
The Company’s customers are related companies, and as such the credit risk is deemed very low. The Company maintains constant communication with its clients to ensure that any unrecoverable income is kept to a minimum.

Liquidity risk
 
The Company generates operational cash surpluses and day to day cash flow is maintained by retaining surplus cash in readily accessible bank accounts. Working capital requirements are met through the readily available cash.
Market price risk
The directors do not believe that, due to the nature of the Company's principal activity, the company is exposed to significant movement in market prices of its services.


This report was approved by the board on 5 August 2024 and signed on its behalf.



Eleni Fergadi
Director
Page 1

 
MERCANTILE & MARITIME UK LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

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

Directors' responsibilities statement

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 judgments 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 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.

Results and dividends

The profit for the year, after taxation, amounted to £281,734 (2021 - £429,747).

The directors do not recommend the payment of a final dividend.

Directors

The directors who served during the year were:

Eleni Fergadi 
Murtaza Lakhani 

Page 2

 
MERCANTILE & MARITIME UK LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Going concern

The Board of Directors continue to monitor the ongoing impact of COVID-19 to the business. The growing positive reserve position, as well as the strong cash position, allows the directors to believe that successful trading will continue beyond the year end and into the future.
In the current business climate, the Board of Directors continue to monitor the COVID-19 pandemic and oversee the logistical and organisational changes to day-to-day operations that underpin the Company's resilience to COVID-19.
In light of the forecasts prepared, the Board of Directors remain of the view that the forecast is achievable and that the headroom within the forecast should be sufficient to enable the Company to operate and meets its liabilities as they fall due for payment throughout the year.
Thus the directors continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Future developments

The Company is expecting to continue to support the current customer base and maintain continued growth of its existing revenue streams.

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.

Auditors

The auditorsBarnes Roffe LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 5 August 2024 and signed on its behalf.
 





Eleni Fergadi
Director
Page 3

 
MERCANTILE & MARITIME UK LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MERCANTILE & MARITIME UK LIMITED
 

Opinion


We have audited the financial statements of Mercantile & Maritime UK Limited (the 'Company') for the year ended 31 December 2022, 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 31 December 2022 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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 4

 
MERCANTILE & MARITIME UK LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MERCANTILE & MARITIME 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 ReportOur 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 2, 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 5

 
MERCANTILE & MARITIME UK LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MERCANTILE & MARITIME 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:

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur by: 
• Considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and  
          regulations;
• Reviewing the financial statements and testing the disclosures against supporting documentation;
• Performing analytical procedures to identify any unusual or unexpected trends or anomalies;
• Inspecting and testing journal entries to identify unusual or unexpected transactions;
• Assessing whether judgement and assumptions made in determining significant accounting estimates, 
          were indicative of management bias


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.


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.





Ricky Downey (Senior statutory auditor)
for and on behalf of
Barnes Roffe LLP
Chartered Accountants & Statutory Auditor
Leytonstone House
Leytonstone
London
E11 1GA

5 August 2024
Page 6

 
MERCANTILE & MARITIME UK LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022

2022
2021
Note
£
£

Turnover
 4 
9,763,447
12,663,940

Cost of sales
  
(1,030,728)
(1,097,417)

Gross profit
  
8,732,719
11,566,523

Administrative expenses
  
(8,241,625)
(10,628,562)

Operating profit
 5 
491,094
937,961

Interest receivable and similar income
 9 
10,663
184,031

Interest payable and similar charges
 10 
(36,831)
(565,156)

Profit before tax
  
464,926
556,836

Tax on profit
 11 
(183,192)
(127,089)

Profit for the financial year
  
281,734
429,747

There were no recognised gains and losses for 2022 or 2021 other than those included in the statement of comprehensive income.

There was no other comprehensive income for 2022 (2021 - £Nil).

The notes on pages 12 to 25 form part of these financial statements.
Page 7

 
MERCANTILE & MARITIME UK LIMITED
REGISTERED NUMBER: 09648525

BALANCE SHEET
AS AT 31 DECEMBER 2022

2022
2022
2021
2021
Note
£
£
£
£

Fixed assets
  

Intangible assets
 12 
3,378
3,861

Tangible assets
 13 
1,766,720
2,272,362

  
1,770,098
2,276,223

Current assets
  

Debtors: amounts falling due within one year
 14 
3,485,713
3,462,051

Cash at bank and in hand
 15 
2,447,559
2,155,939

  
5,933,272
5,617,990

Creditors: amounts falling due within one year
 16 
(4,251,902)
(4,679,479)

Net current assets
  
 
 
1,681,370
 
 
938,511

Total assets less current liabilities
  
3,451,468
3,214,734

Provisions for liabilities
  

Deferred tax
 17 
(67,393)
(67,393)

Other provisions
 18 
-
(45,000)

  
 
 
(67,393)
 
 
(112,393)

Net assets
  
3,384,075
3,102,341


Capital and reserves
  

Called up share capital 
 19 
1
1

Profit And Loss Account
 20 
3,384,074
3,102,340

  
3,384,075
3,102,341


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 5 August 2024.




Eleni Fergadi
Director

The notes on pages 12 to 25 form part of these financial statements.
Page 8

 
MERCANTILE & MARITIME UK LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 January 2021
1
2,672,593
2,672,594


Comprehensive income for the year

Profit for the year
-
429,747
429,747



At 1 January 2022
1
3,102,340
3,102,341


Comprehensive income for the year

Profit for the year
-
281,734
281,734


At 31 December 2022
1
3,384,074
3,384,075


The notes on pages 12 to 25 form part of these financial statements.
Page 9

 
MERCANTILE & MARITIME UK LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022

2022
2021
£
£

Cash flows from operating activities

Profit for the financial year
281,734
429,747

Adjustments for:

Amortisation of intangible assets
483
483

Depreciation of tangible assets
522,528
567,294

Interest paid
36,831
565,156

Interest received
(10,663)
(184,031)

Taxation charge
183,192
127,089

(Increase)/decrease in debtors
(23,662)
13,739,534

(Decrease) in creditors
(440,112)
(15,546,915)

(Decrease)/increase in provisions
(45,000)
-

Corporation tax (paid)
(170,657)
(216,786)

Net cash generated from operating activities

334,674
(518,429)


Cash flows from investing activities

Purchase of tangible fixed assets
(16,886)
(80,197)

Interest received
10,663
184,031

Net cash from investing activities

(6,223)
103,834

Cash flows from financing activities

Interest paid
(36,831)
(565,156)

Net cash used in financing activities
(36,831)
(565,156)

Net increase/(decrease) in cash and cash equivalents
291,620
(979,751)

Cash and cash equivalents at beginning of year
2,155,939
3,135,690

Cash and cash equivalents at the end of year
2,447,559
2,155,939


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
2,447,559
2,155,939

2,447,559
2,155,939


The notes on pages 12 to 25 form part of these financial statements.

Page 10

 
MERCANTILE & MARITIME UK LIMITED
 

ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2022




At 1 January 2022
Cash flows
At 31 December 2022
£

£

£

Cash at bank and in hand

2,155,939

291,620

2,447,559


2,155,939
291,620
2,447,559

The notes on pages 12 to 25 form part of these financial statements.

Page 11

 
MERCANTILE & MARITIME UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.


General information

Mercantile & Maritime UK Limited ("the Company") is a private company limited by shares incorporated in England and Wales and domiciled in England. 
Its registered number is 09648525 and its registered office is 1 Ashley Road, Altrincham, Cheshire, United Kingdom, WA14 2DT.
The principle activity of the Company is the provision of support services to global shipping and logistics businesses.

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 judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Going concern

The company's business activities are set out in the Business Review which forms part of the Strategic report.
The Board of Directors has continued to monitor the ongoing impact of COVID-19 to the business. The growing positive reserve position, as well as the strong cash position, allows the directors to believe that successful trading will continue beyond the year end and into the future.
In the current business climate, the Board of Directors continue to monitor the COVID-19 pandemic
and oversee the logistical and organisational changes to day-to-day operations that underpin the
Company's resilience to COVID-19.
In light of the forecasts prepared, the Board of Directors remain of the view that the forecast is
achievable and that the headroom within the forecast should be sufficient to enable the Company to operate and meets its liabilities as they fall due for payment throughout the year.
Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Page 12

 
MERCANTILE & MARITIME UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.3

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

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.

 
2.4

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:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

 
2.5

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.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.6

Interest income

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

Page 13

 
MERCANTILE & MARITIME UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.7

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.

 
2.8

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 profit or loss 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.

 
2.9

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. 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.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Page 14

 
MERCANTILE & MARITIME UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.10

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.

 Amortisation is provided on the following bases:

Website Development
-
10%
straight line

 
2.11

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.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method and reducing balance basis..

Depreciation is provided on the following basis:

Leasehold property
-
Over the term of the lease
Motor vehicles
-
20% straight line
Fixtures and fittings
-
25% reducing balance
Office equipment
-
33% straight line

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.

 
2.12

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, 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 of not more than 24 hours. 
In the Statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

Page 15

 
MERCANTILE & MARITIME UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.14

Creditors

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

 
2.15

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

 
2.16

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 present value of the future cash flows 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.


3.


Judgments 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. 
Critical accounting estimates and assumptions:
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.
Impairment of debtors
The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience.

Page 16

 
MERCANTILE & MARITIME UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

4.


Turnover

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


2022
2021
£
£

Recharges and fees receivable
9,763,447
12,663,940


Analysis of turnover by country of destination:

2022
2021
£
£

United Kingdom
911,651
1,071,301

Rest of the world
8,851,796
11,592,639

9,763,447
12,663,940



5.


Operating profit

The operating profit is stated after charging:

2022
2021
£
£

Exchange differences
(156,903)
54,789

Other operating lease rentals
683,606
1,018,466


6.


Auditors' remuneration

2022
2021
£
£



Fees payable to the Company's auditors and its associates for the audit of the Company's financial statements
15,000
15,000


Fees payable to the Company's auditor and its associates in respect of:


All other services
11,530
23,553

Page 17

 
MERCANTILE & MARITIME UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

7.


Employees

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


2022
2021
£
£

Wages and salaries
4,308,591
5,587,082

Social security costs
539,276
716,052

Cost of defined contribution scheme
34,955
44,804

4,882,822
6,347,938


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


        2022
        2021
            No.
            No.







Employees
31
42


8.


Directors' remuneration

2022
2021
£
£

Directors' emoluments
-
231,422


The highest paid director received remuneration of £Nil (2021 - £156,607).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £Nil (2021 - £328).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of directors in total amounted £Nil (2021 - £656) accruing to no (2021 - 2) directors.


9.


Interest receivable and similar income

2022
2021
£
£


Other interest receivable
10,663
184,031

Page 18

 
MERCANTILE & MARITIME UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

10.


Interest payable and similar charges

2022
2021
£
£


Bank interest payable
-
505

Other loan interest payable
36,831
564,651

36,831
565,156


11.


Taxation


2022
2021
£
£

Corporation tax


Current tax on profits for the year
183,192
170,657


Total current tax
183,192
170,657

Deferred tax


Origination and reversal of timing differences
-
(43,568)

Total deferred tax
-
(43,568)


Tax on profit
183,192
127,089
Page 19

 
MERCANTILE & MARITIME UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
 
11.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2021 - higher than) the standard rate of corporation tax in the UK of 19% (2021 - 19%). The differences are explained below:

2022
2021
£
£


Profit on ordinary activities before tax
464,926
556,836


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
88,336
105,799

Effects of:


Admin expenses disallowable for relief
39,531
9,580

Depreciation for year in excess of capital allowances
91,686
72,506

Short lease premiums
(11,887)
(11,887)

Pension contributions deductible on paid basis
(1,642)
(568)

Timing differences leading to an increase (decrease) in taxation
(22,832)
(43,568)

Interest payable deductible on paid basis
-
(4,773)

Total tax charge for the year
183,192
127,089


Factors that may affect future tax charges

The corporation tax rate will increase to 25% for companies with profits above £250,000 with effect from 1 April 2023.

Page 20

 
MERCANTILE & MARITIME UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

12.


Intangible assets




Website development

£



Cost


At 1 January 2022
4,830



At 31 December 2022

4,830



Amortisation


At 1 January 2022
969


Charge for the year on owned assets
483



At 31 December 2022

1,452



Net book value



At 31 December 2022
3,378



At 31 December 2021
3,861



Page 21

 
MERCANTILE & MARITIME UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

13.


Tangible fixed assets





Leasehold property
Motor vehicles
Fixtures and fittings
Office equipment
Total

£
£
£
£
£



Cost or valuation


At 1 January 2022
2,803,681
54,700
1,530,203
363,407
4,751,991


Additions
-
-
-
16,886
16,886



At 31 December 2022

2,803,681
54,700
1,530,203
380,293
4,768,877



Depreciation


At 1 January 2022
1,154,869
912
1,071,850
251,998
2,479,629


Charge for the year on owned assets
304,845
10,940
112,656
94,087
522,528



At 31 December 2022

1,459,714
11,852
1,184,506
346,085
3,002,157



Net book value



At 31 December 2022
1,343,967
42,848
345,697
34,208
1,766,720



At 31 December 2021
1,648,812
53,788
458,353
111,409
2,272,362


14.


Debtors

2022
2021
£
£

Due after more than one year

Other debtors
443,452
1,405,130

Due within one year

Trade debtors
509,131
1,442,714

Other debtors
1,940,017
331,393

Prepayments and accrued income
593,113
282,814

3,485,713
3,462,051


Page 22

 
MERCANTILE & MARITIME UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

15.


Cash and cash equivalents

2022
2021
£
£

Cash at bank and in hand
2,447,559
2,155,939



16.


Creditors: Amounts falling due within one year

2022
2021
£
£

Trade creditors
1,492,666
178,552

Corporation tax
182,709
170,174

Other taxation and social security
42,342
771,115

Other creditors
1,245,585
2,455,311

Accruals and deferred income
1,288,600
1,104,327

4,251,902
4,679,479



17.


Deferred taxation




2022
2021


£

£






At beginning of year
(67,393)
(110,961)


Charged to the Statement of comprehensive income
-
43,568



At end of year
(67,393)
(67,393)

The provision for deferred taxation is made up as follows:

2022
2021
£
£


Accelerated capital allowances
(67,393)
(67,393)

Page 23

 
MERCANTILE & MARITIME UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

18.


Provisions




Other provision

£


At 1 January 2022
45,000


Utilised in year
(45,000)



At 31 December 2022
-


19.


Share capital

2022
2021
£
£
Allotted, called up and fully paid



1 (2021 - 1) Ordinary share of £1.00
1
1



20.


Reserves

Profit and loss account

Profit and loss account reserve relates to accumulated profits less distributions to shareholders.


21.


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 £34,955 (2021 - £44,804). Contributions totalling Nil (2021 - £8,643) were payable to the fund at the balance sheet date and are included in creditors.


22.


Commitments under operating leases

At 31 December 2022 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2022
2021
£
£



Not later than 1 year
1,272,422
1,272,422

Later than 1 year and not later than 5 years
3,862,970
4,656,877

Later than 5 years
1,089,049
1,567,564

6,224,441
7,496,863

Page 24

 
MERCANTILE & MARITIME UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

23.


Related party transactions

Included within other debtors due within one year is an amount of £1,203 (2021 - £877,109 owed to) owed by the ultimate controlling party. The loan is unsecured and charges interest at the HMRC rate implicit of the loan. During the year interest was charged on the loan of £379 (2021 - £Nil). There are no formal terms and conditions regarding repayment of the loan.
Included within debtors are amounts of £568,882 (
2021 - £1,505,217) owed by connected companies.
Included within creditors are amounts of £3,109,334 (
2021 - £1,698,723) owed to connected companies.


24.


Controlling party

The ultimate controlling party of the Company is considered to be Murtaza Lakhani by virtue of their 100% shareholding.
 
Page 25