Company registration number 14542199 (England and Wales)
MIDLANDS JCB LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2024
MIDLANDS JCB LIMITED
COMPANY INFORMATION
Directors
Mr R A M Winter
Mr G J Lumsdaine
Company number
14542199
Registered office
Lakeside Works Denstone Road
Rocester
Uttoxeter
ST14 5JP
Auditor
Ormerod Rutter Limited
The Oakley
Kidderminster Road
Droitwich
Worcestershire
WR9 9AY
MIDLANDS JCB LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Profit and loss account
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 21
MIDLANDS JCB LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 30 APRIL 2024
- 1 -
The directors present the strategic report for the period ended 30 April 2024.
Principal activities
During the period the business operated as a specialist in selling used and new JCB machines in the UK operating from sites in Hereford, Smethwick and Stoke on Trent combined with a parts and service facility.
Review of the Business
This was the first trading period for the business. The external environment, particularly with high interest rates and a backdrop of economic uncertainty meant that although the business made revenue of £22m it made a loss of £2.2m. The directors considered that the business and its customers would be better served by being part of a larger and more established JCB distributorship and consequently sold the trade and assets to Watling JCB Limited on 2 September 2024.
Mr R A M Winter
Director
13 September 2024
MIDLANDS JCB LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 30 APRIL 2024
- 2 -
The directors present their annual report and financial statements for the period ended 30 April 2024.
Results and dividends
The results for the period are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
Mr D J R Hill
(Appointed 15 December 2022 and resigned 16 February 2024)
Mr A D Reekie
(Appointed 16 May 2023 and resigned 16 February 2024)
Mr R A M Winter
(Appointed 16 February 2024)
Mr G J Lumsdaine
(Appointed 16 February 2024)
Mr Paul Hartshorn
(Appointed 15 December 2022 and resigned 16 May 2023)
Mr Michael Hutchinson
(Appointed 15 December 2022 and resigned 16 May 2023)
Statement of directors' responsibilities
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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The 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.
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
MIDLANDS JCB LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 3 -
On behalf of the board
Mr R A M Winter
Director
13 September 2024
MIDLANDS JCB LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF MIDLANDS JCB LIMITED
- 4 -
Opinion
We have audited the financial statements of Midlands JCB Limited (the 'company') for the period ended 30 April 2024 which comprise the profit and loss account, 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:
give a true and fair view of the state of the company's affairs as at 30 April 2024 and of its loss for the period 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.
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.
Emphasis of matter - financial statements prepared on a basis other than going concern
We draw attention to note 22 of the financial statements, which explains that the trade and selected assets of the company were sold to a third party on 2 September 2024. Therefore we do not consider it appropriate to adopt a going concern basis of accounting in preparing the financial statements. Accordingly, the financial statements have been prepared on a basis other than going concern as described in note 1.3. Our opinion is not modified in this respect.
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:
the information given in the strategic report and the directors' report for the financial period 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.
MIDLANDS JCB LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF MIDLANDS JCB LIMITED (CONTINUED)
- 5 -
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 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, 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the industry;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or operations of the company and group, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, environmental and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations; and
understanding the design of the company’s remuneration policies.
MIDLANDS JCB LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF MIDLANDS JCB LIMITED (CONTINUED)
- 6 -
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual transactions or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates set out in note 2 were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance; and
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC, relevant regulators and the company’s legal advisors.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Colm McGrory FCA
Senior Statutory Auditor
For and on behalf of Ormerod Rutter Limited
13 September 2024
Chartered Accountants
Statutory Auditor
The Oakley
Kidderminster Road
Droitwich
Worcestershire
WR9 9AY
MIDLANDS JCB LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 30 APRIL 2024
- 7 -
16 months
ended
30 April
2024
Notes
£
Turnover
3
21,935,372
Cost of sales
(19,177,090)
Gross profit
2,758,282
Administrative expenses
(4,075,197)
Exceptional item
4
(461,712)
Operating loss
5
(1,778,627)
Interest payable and similar expenses
7
(453,381)
Loss before taxation
(2,232,008)
Tax on loss
8
Loss for the financial period
(2,232,008)
The profit and loss account has been prepared on the basis that all operations are discontinuing operations.
The notes on pages 10 to 21 form part of these financial statements.
MIDLANDS JCB LIMITED
BALANCE SHEET
AS AT
30 APRIL 2024
30 April 2024
- 8 -
2024
Notes
£
£
Fixed assets
Tangible assets
11
350,336
Current assets
Stocks
12
2,991,285
Debtors
13
1,998,341
Cash at bank and in hand
412,414
5,402,040
Creditors: amounts falling due within one year
14
(7,522,572)
Net current liabilities
(2,120,532)
Total assets less current liabilities
(1,770,196)
Provisions for liabilities
Provisions
17
461,712
(461,712)
Net liabilities
(2,231,908)
Capital and reserves
Called up share capital
20
100
Profit and loss reserves
(2,232,008)
Total equity
(2,231,908)
The notes on pages 10 to 21 form part of these financial statements.
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 13 September 2024 and are signed on its behalf by:
Mr R A M Winter
Director
Company registration number 14542199 (England and Wales)
MIDLANDS JCB LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 APRIL 2024
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 15 December 2022
-
Period ended 30 April 2024:
Loss and total comprehensive income
-
(2,232,008)
(2,232,008)
Issue of share capital
20
100
-
100
Balance at 30 April 2024
100
(2,232,008)
(2,231,908)
The notes on pages 10 to 21 form part of these financial statements.
MIDLANDS JCB LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2024
- 10 -
1
Accounting policies
Company information
Midlands JCB Limited is a private company limited by shares incorporated in England and Wales. The registered office is Lakeside Works Denstone Road, Rocester, Uttoxeter, England, ST14 5JP.
1.1
Reporting period
The financial statements relate to the 16 month period from incorporation on 15 December 2022 to 30 April 2024. No comparative amounts are available.
1.2
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, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. 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:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of J.C.B. Service. These consolidated financial statements are available from its registered office, Lakeside Works, Denstone Road, Rocester, Uttoxeter, ST14 5JP.
1.3
Going concern
As explained in note 22 of the financial statements, the company has ceased trading post year end. The financial statements for the year ended 30 April 2024 have been prepared on a basis other than that of a going concern basis. This includes writing down the assets to net realisable value. Provisions have been made for future costs of terminating the business as the costs were committed to at the reporting date.
1.4
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. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
MIDLANDS JCB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 11 -
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.
Revenue from the provision of services is recognised by reference to the stage of completion, when the costs incurred and costs to complete can be estimated reliably.
1.5
Intangible fixed assets - goodwill
Negative goodwill arising on the acquisition of businesses, representing any deficit of the fair value of the consideration given over the fair value of the identifiable assets and liabilities acquired, is capitalised and is credited to the profit and loss account in the period in which the acquired non-monetary assets are recovered through the depreciation or sale. Negative goodwill in excess of the fair values of the non-monetary assets acquired is credited to the profit and loss account in the periods expected to benefit.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold land and buildings
10 years straight line
Plant and equipment
3 years straight line
Fixtures and fittings
3 years straight line
Computers
5 years straight line
Motor vehicles
3 years straight line
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.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
MIDLANDS JCB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 12 -
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.8
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.
1.9
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.10
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.
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.
MIDLANDS JCB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 13 -
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, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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.
MIDLANDS JCB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 14 -
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 remeasured 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.
1.11
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.
1.12
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.13
Employee benefits
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.
MIDLANDS JCB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 15 -
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.
3
Turnover
2024
£
Turnover analysed by class of business
Sale of new and used equipment
16,937,324
Repairs, maintenance services and other
4,998,048
21,935,372
2024
£
Turnover analysed by geographical market
United Kingdom
21,935,372
4
Exceptional item
2024
£
Expenditure
Exceptional items
461,712
Exceptional items comprise of provisions for the costs that will be incurred by the company to cease operations post year end.
5
Operating loss
2024
Operating loss for the period is stated after charging/(crediting):
£
Exchange gains
(133)
Fees payable to the company's auditor for the audit of the company's financial statements
17,500
Depreciation of owned tangible fixed assets
250,631
Impairment of owned tangible fixed assets
529,806
Amortisation of intangible assets
(85,741)
Operating lease charges
62,629
MIDLANDS JCB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 16 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the period was:
2024
Number
51
Their aggregate remuneration comprised:
2024
£
Wages and salaries
1,433,757
Social security costs
223,668
Pension costs
80,783
1,738,208
7
Interest payable and similar expenses
2024
£
Interest on bank overdrafts and loans
453,381
8
Taxation
The actual charge for the period can be reconciled to the expected credit for the period based on the profit or loss and the standard rate of tax as follows:
2024
£
Loss before taxation
(2,232,008)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.88%
(533,004)
Unrecognised tax losses carried forward
533,004
Taxation charge for the period
-
The tax losses which originated in the period are not expected to be utilised and therefore a deferred tax asset has not been recognised.
MIDLANDS JCB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 17 -
9
Impairments
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
2024
Notes
£
In respect of:
Property, plant and equipment
11
529,806
Recognised in:
Administrative expenses
529,806
10
Intangible fixed assets
Negative goodwill
£
Cost
At 15 December 2022
Additions - business combinations
(85,741)
At 30 April 2024
(85,741)
Amortisation and impairment
At 15 December 2022
Amortisation credited for the period
(85,741)
At 30 April 2024
(85,741)
Carrying amount
At 30 April 2024
More information on impairment movements in the period is given in note 9.
MIDLANDS JCB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 18 -
11
Tangible fixed assets
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 15 December 2022
Additions
65,796
8,706
46,235
519,922
490,114
1,130,773
At 30 April 2024
65,796
8,706
46,235
519,922
490,114
1,130,773
Depreciation and impairment
At 15 December 2022
Depreciation charged in the period
4,612
242
13,353
84,182
148,242
250,631
Impairment losses
61,184
32,882
435,740
529,806
At 30 April 2024
65,796
242
46,235
519,922
148,242
780,437
Carrying amount
At 30 April 2024
8,464
341,872
350,336
More information on impairment movements in the period is given in note 9.
12
Stocks
2024
£
Raw materials and consumables
286,141
Work in progress
188,578
Finished goods and goods for resale
2,516,566
2,991,285
13
Debtors
2024
Amounts falling due within one year:
£
Trade debtors
1,078,498
Amounts owed by group undertakings
21,989
Other debtors
757,147
Prepayments and accrued income
140,707
1,998,341
Amounts owed by group undertakings represents a trading balance owed by Stanley Property Holdings Limited, which is interest free.
MIDLANDS JCB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 19 -
14
Creditors: amounts falling due within one year
2024
Notes
£
Obligations under finance leases
16
335,212
Other borrowings
15
4,743,000
Trade creditors
461,619
Gross amounts owed to contract customers
57,631
Amounts owed to group undertakings
1,116,443
Taxation and social security
52,079
Other creditors
704,737
Accruals and deferred income
51,851
7,522,572
15
Loans and overdrafts
2024
£
Loans from group undertakings
4,743,000
Payable within one year
4,743,000
The long-term loans from group undertakings are unsecured, interest free and have no fixed date of repayment.
16
Finance lease obligations
2024
Future minimum lease payments due under finance leases:
£
Within one year
335,212
Finance lease payments represent rentals payable by the company for vehicles and certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is three years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
MIDLANDS JCB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 20 -
17
Provisions for liabilities
2024
£
Closure provisions
461,712
Movements on provisions:
Closure provisions
£
Additional provisions in the year
461,712
Provisions comprise of expected costs that the company will incur post 30 April 2024 to cease operations. The provisions are expected to be utilised within 12 months of the year end.
18
Secured debts
The following secured debts are included within creditors:
2024
£
Hire purchase contracts
335,212
Hire purchase contracts are secured against the assets to which they relate.
19
Retirement benefit schemes
2024
Defined contribution schemes
£
Charge to profit or loss in respect of defined contribution schemes
80,783
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.
20
Share capital
2024
2024
Ordinary share capital
Number
£
Issued and fully paid
Ordinary shares of £1 each
100
100
21
Financial commitments, guarantees and contingent liabilities
The company has provided a cross guarantee and there is a debenture over the company's assets in favour of the company's bank for a mortgage advanced by the bank to the company's immediate parent company, Stanley Property Holdings Limited.
MIDLANDS JCB LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 30 APRIL 2024
- 21 -
22
Events after the reporting date
On 2 September 2024, the trade and selected assets of the company were sold to Watling JCB Limited, a third party, and the company ceased to trade.
23
Ultimate controlling party
The immediate parent company is Stanley Property Holdings Limited, a company registered in England and Wales.
J.C.B. Service is the smallest company to consolidated the results of the company. The largest company to consolidate the financial statements of the company is JCB Group Holdings Sàrl, a company incorporated in Switzerland. JCB Group Holdings Sàrl is ultimately controlled by Bamford family interests.
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