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Registered number: 07067258









BEST QUALITY WATCHES LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2024

 
BEST QUALITY WATCHES LIMITED
 
 
COMPANY INFORMATION


Director
Spencer Dryer 




Registered number
07067258



Registered office
74-76 Watling Street

Radlett

WD7 7NP




Independent auditors
Adler Shine LLP
Chartered Accountants and Statutory Auditor

Aston House

Cornwall Avenue

London

N3 1LF





 
BEST QUALITY WATCHES LIMITED
 

CONTENTS



Page
Strategic Report
1
Director's Report
2 - 3
Independent Auditors' Report
4 - 7
Statement of Comprehensive Income
8
Balance Sheet
9 - 10
Notes to the Financial Statements
11 - 28

 
BEST QUALITY WATCHES LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024

Introduction
 
The director presents the Strategic Report for the year ended 30 June 2024.

Fair review of the business

The results for the year and financial position of the Company are shown in the annexed financial statements.
 
The results, which exceeded our business plan, reflect the continued sales success in the UK and most of our overseas territories.
 
We achieved our continued objective for the twelve month period to grow and maintain our UK market share and website presence, by gaining new customers, along with retaining our existing customer base and venture into new areas and sales platforms.  Long term sustainability remains a key focus as we continue in the coming periods by investigating new markets and maintaining our position.
 
We remain at the forefront of the preowned luxury market in the UK through our focus and emphasis on personal service.  Aligned to this, we are investing in our UK business to provide excellent support.
 
The outlook for the business in the next period will continue to be influenced by both the downturn in trade of expensive watches globally and fears of a recession both worldwide and within the UK.  Our focus for 2024-2025 is to maintain our market share in the UK and ensure sustained growth.
 
The Company is fully confident of mitigating this risk through ongoing swfit and responsible actions it would need to make in respect of any such changes and the management already has a successful history of positively implementing change when required.
 
Key performance indicators
 
Key performance indicators used by the Company include turnover, gross profit percentage, expenses ratios and profit before tax percentages.


On behalf of the board.


................................................
Spencer Dryer
Director

Date: 24 March 2025
Page 1

 
BEST QUALITY WATCHES LIMITED
 
 
 
DIRECTOR'S REPORT
FOR THE YEAR ENDED 30 JUNE 2024

The director presents his report and the financial statements for the year ended 30 June 2024.

Director's responsibilities statement

The director is responsible for preparing the Strategic Report, the Director's Report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the director is required to:


select suitable accounting policies 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 director is responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable him to ensure that the financial statements comply with the Companies Act 2006He is also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The profit for the year, after taxation, amounted to £281,506 (2023 - £260).

Ordinary dividends were paid amounting to £130,000 (2023: £130,000).

Director

The director who served during the year was:

Spencer Dryer 

Future developments

The Company continues to trade in line with expectations. 

Disclosure of information to auditors

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

he 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.

Page 2

 
BEST QUALITY WATCHES LIMITED
 
 
 
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024

Post balance sheet events

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

Auditors

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

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


................................................
Spencer Dryer
Director

Date: 24 March 2025

Page 3

 
BEST QUALITY WATCHES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BEST QUALITY WATCHES LIMITED
 

Opinion


We have audited the financial statements of Best Quality Watches Limited (the 'Company') for the year ended 30 June 2024, which comprise the Statement of Comprehensive Income, the Balance Sheet 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 30 June 2024 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 director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


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


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


Page 4

 
BEST QUALITY WATCHES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BEST QUALITY WATCHES 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 director is 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 Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Director's 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 Director's 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 director's remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Director's Responsibilities Statement set out on page 2, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines 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 director is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


Page 5

 
BEST QUALITY WATCHES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BEST QUALITY WATCHES 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 identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and noncompliance with laws and regulations, we have:
- considered the nature of the industry and sectors, control environment and business performance;
- made enquires of management about their own identification and assessment of the risk of irregularities;
- performed audit work over the risk of management override of controls, including testing of journal entries and
  other adjustments for appropriateness and reviewing accounting estimates for bias;
- undertaken appropriate sample based testing of bank transactions;
- identified and evaluated compliance with relevant laws and regulations and made enquiries of any instances of
   non-compliance;
- discussed matters among the audit engagement team regarding how and where fraud might occur in the
   financial statements and potential indicators of fraud.


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.


Page 6

 
BEST QUALITY WATCHES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BEST QUALITY WATCHES LIMITED (CONTINUED)


Use of our report
 

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





Engin Zekia BSc FCA (Senior Statutory Auditor)
for and on behalf of
Adler Shine LLP
Chartered Accountants and Statutory Auditor
Aston House
Cornwall Avenue
London
N3 1LF

24 March 2025
Page 7

 
BEST QUALITY WATCHES LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024

2024
2023
Note
£
£

  

Sales
  
23,734,222
19,871,690

Cost of sales
  
(20,886,588)
(17,779,067)

Gross profit
  
2,847,634
2,092,623

Administrative expenses
  
(2,287,830)
(1,823,092)

Other operating income
  
17,944
14,049

Operating profit
 6 
577,748
283,580

Interest receivable and similar income
 10 
6,054
-

Interest payable and similar expenses
 11 
(268,058)
(343,571)

Profit/(loss) before tax
  
315,744
(59,991)

Tax on profit/(loss)
 12 
(34,238)
60,251

Profit for the financial year
  
281,506
260

There were no recognised gains and losses for 2024 or 2023 other than those included in the statement of comprehensive income.

There was no other comprehensive income for 2024 (2023:£NIL).

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

Page 8

 
BEST QUALITY WATCHES LIMITED
REGISTERED NUMBER: 07067258

BALANCE SHEET
AS AT 30 JUNE 2024

2024
2023
Note
£
£

Fixed assets
  

Intangible assets
 14 
15,622
20,432

Tangible assets
 15 
1,291,369
1,282,040

  
1,306,991
1,302,472

Current assets
  

Stocks
 16 
5,147,309
7,597,215

Debtors: amounts falling due within one year
 17 
617,261
765,643

Cash at bank and in hand
 18 
1,425,034
1,378,121

  
7,189,604
9,740,979

Creditors: amounts falling due within one year
 19 
(1,459,945)
(3,685,221)

Net current assets
  
 
 
5,729,659
 
 
6,055,758

Total assets less current liabilities
  
7,036,650
7,358,230

Creditors: amounts falling due after more than one year
 20 
(4,000,811)
(4,508,135)

Provisions for liabilities
  

Deferred tax
 23 
(99,883)
(65,645)

  
 
 
(99,883)
 
 
(65,645)

Net assets
  
2,935,956
2,784,450


Capital and reserves
  

Called up share capital 
 24 
2,000
2,000

Share premium account
 25 
1,999,000
1,999,000

Capital redemption reserve
 25 
67
67

Profit and loss account
 25 
934,889
783,383

  
2,935,956
2,784,450


Page 9

 
BEST QUALITY WATCHES LIMITED
REGISTERED NUMBER: 07067258
    
BALANCE SHEET (CONTINUED)
AS AT 30 JUNE 2024

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




................................................
Spencer Dryer
Director

Date: 24 March 2025

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

Page 10

 
BEST QUALITY WATCHES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

1.


General information

Best Quality Watches Limited is a private company limited by shares and is incorporated in England & Wales.  Its registered office is 74-76 Watling Street, Radlett WD7 7NP.  The principal activity of the Company is the sale of pre-owned watches. 

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

At the time of approving the financial statements, the director has a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future.  Thus, the director continues to adopt the going concern basis of accounting in preparing the financial statements.

 
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.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

Page 11

 
BEST QUALITY WATCHES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

2.Accounting policies (continued)

 
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:

Sale of goods

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

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 profit or loss 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 profit or loss using the effective interest method.

 
2.7

Finance costs

Finance costs are charged to profit or loss 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.

Page 12

 
BEST QUALITY WATCHES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

2.Accounting policies (continued)

 
2.8

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

 
2.9

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.

 
2.10

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss 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 13

 
BEST QUALITY WATCHES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

2.Accounting policies (continued)

 
2.11

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Statement of Comprehensive Income over its useful economic life.

Other intangible assets

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

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

 
2.12

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.

At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis.

Depreciation is provided on the following basis:

Short-term leasehold property
-
over the period of the lease
Plant and machinery
-
20%
reducing balance
Fixtures and fittings
-
20%
reducing balance
Computer 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 profit or loss.

Page 14

 
BEST QUALITY WATCHES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

2.Accounting policies (continued)

 
2.13

Stocks

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

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

 
2.14

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.

 
2.15

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.

 
2.16

Holiday pay accrual

A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date.

 
2.17

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.

 
2.18

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

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.
Page 15

 
BEST QUALITY WATCHES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

2.Accounting policies (continued)


2.18
Financial instruments (continued)


Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

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

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

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

Page 16

 
BEST QUALITY WATCHES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

2.Accounting policies (continued)


2.18
Financial instruments (continued)

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Other financial instruments

Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.

Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.

 
2.19

Dividends

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

Page 17

 
BEST QUALITY WATCHES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

In the application of the Company's accounting policies, the director is required to make judgments, 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 effects both current and future periods.
Trade debtors
Judgments have been made on the recoverability of trade debtors and the provisions of doubtful debts.
The directors are satisfied that trade debtors are recoverable except for those provided against.
Stock provisions
Management perform impairment reviews of the stocks held to determine if stocks can be sold at amounts greater than or equal to their carrying amounts plus costs to sell. This review includes identification of slow moving stock. Management makes an allowance for any items considered to be impaired and is based on the historical performance of the stocks as well as industry and customer specific requirements. The allowance represents the difference between the cost of stocks and its estimated net realisable value.


4.


Turnover

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


2024
2023
£
£

Sale of pre-owned watches
23,553,658
19,670,979

Repair of watches
180,564
200,711

23,734,222
19,871,690


Analysis of turnover by country of destination:

2024
2023
£
£

United Kingdom
22,646,496
19,371,200

Rest of the world
1,087,726
500,490

23,734,222
19,871,690


Page 18

 
BEST QUALITY WATCHES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

5.


Other operating income

2024
2023
£
£

Other operating income
17,944
14,049

17,944
14,049



6.


Operating profit

The operating profit is stated after charging:

2024
2023
£
£

Exchange differences
2,879
8,403

Other operating lease rentals
115,290
91,914

Tangible fixed assets - depreciation
12,127
35,002

Intangible fixed assets - amortisation
4,810
4,810


7.


Auditors' remuneration

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


2024
2023
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
26,200
22,000
Page 19

 
BEST QUALITY WATCHES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

8.


Employees

Staff costs, including director's remuneration, were as follows:


2024
2023
£
£

Wages and salaries
759,121
696,658

Social security costs
76,935
64,038

Cost of defined contribution scheme
12,962
9,223

849,018
769,919


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


        2024
        2023
            No.
            No.







Office and administration
12
12



Selling and acquisitions
7
6



Watchmakers and technicians
6
6

25
24


9.


Director's remuneration

2024
2023
£
£

Director's emoluments
9,173
9,173

9,173
9,173



10.


Interest receivable

2024
2023
£
£


Other interest receivable
6,054
-

6,054
-

Page 20

 
BEST QUALITY WATCHES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

11.


Interest payable and similar expenses

2024
2023
£
£


Bank interest payable
76,349
76,146

Other loan interest payable
191,709
267,425

268,058
343,571


12.


Taxation


2024
2023
£
£

Corporation tax


Adjustments in respect of previous periods
-
(100,301)

Total current tax
-
(100,301)

Deferred tax


Origination and reversal of timing differences
34,238
40,050

Total deferred tax
34,238
40,050

Factors affecting tax charge for the year

The tax assessed for the year is the same as (2023 - the same as) the standard rate of corporation tax in the UK of 25% (2023 - 25%) as set out below:

2024
2023
£
£


Profit/(loss) on ordinary activities before tax
315,744
(59,991)


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 25%)
78,936
(14,998)

Effects of:


Capital allowances for year in excess of depreciation
1,857
(230,690)

Non-taxable income less expenses not deductible for tax purposes
20,871
(2,921)

Other differences leading to an increase (decrease) in the tax charge
-
31,675

Deferred tax utilised
34,238
156,683

Tax losses utilised
(101,664)
-

Total tax charge for the year
34,238
(60,251)

Page 21

 
BEST QUALITY WATCHES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

13.


Dividends

2024
2023
£
£


Dividends on ordinary shares
130,000
130,000

130,000
130,000


14.


Intangible assets




Website development
Online marketing tool
Total

£
£
£



Cost


At 1 July 2023
18,052
12,000
30,052



At 30 June 2024

18,052
12,000
30,052



Amortisation


At 1 July 2023
7,220
2,400
9,620


Charge for the year on owned assets
3,610
1,200
4,810



At 30 June 2024

10,830
3,600
14,430



Net book value



At 30 June 2024
7,222
8,400
15,622



At 30 June 2023
10,832
9,600
20,432



Page 22

 
BEST QUALITY WATCHES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

15.


Tangible fixed assets





Short-term leasehold property
Plant and machinery
Fixtures and fittings
Computer equipment
Total

£
£
£
£
£



Cost or valuation


At 1 July 2023
1,145,016
55,400
318,582
123,314
1,642,312


Additions
255,564
7,002
5,939
2,887
271,392


Disposals
-
-
(317,544)
-
(317,544)



At 30 June 2024

1,400,580
62,402
6,977
126,201
1,596,160



Depreciation


At 1 July 2023
-
38,906
210,732
110,633
360,271


Charge for the year on owned assets
140,058
4,699
784
6,644
152,185


Disposals
-
-
(207,665)
-
(207,665)



At 30 June 2024

140,058
43,605
3,851
117,277
304,791



Net book value



At 30 June 2024
1,260,522
18,797
3,126
8,924
1,291,369



At 30 June 2023
1,145,016
16,494
107,849
12,681
1,282,040

Page 23

 
BEST QUALITY WATCHES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

16.


Stocks

2024
2023
£
£

Work in progress
147,064
150,726

Finished goods and goods for resale
5,000,245
7,446,489

5,147,309
7,597,215



17.


Debtors

2024
2023
£
£


Trade debtors
330,766
537,460

Other debtors
106,651
64,511

Prepayments and accrued income
79,491
63,371

Tax recoverable
100,353
100,301

617,261
765,643



18.


Cash and cash equivalents

2024
2023
£
£

Cash at bank and in hand
1,425,034
1,378,121

1,425,034
1,378,121


Page 24

 
BEST QUALITY WATCHES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

19.


Creditors: Amounts falling due within one year

2024
2023
£
£

Bank loans
65,779
227,803

Other loans
780,000
2,916,800

Trade creditors
357,413
270,210

Other taxation and social security
91,830
58,306

Other creditors
83,830
131,783

Accruals and deferred income
81,093
80,319

1,459,945
3,685,221



20.


Creditors: Amounts falling due after more than one year

2024
2023
£
£

Bank loans
194,364
616,923

Other loans
3,806,447
3,891,212

4,000,811
4,508,135


The aggregate amount of liabilities repayable wholly or in part more than five years after the balance sheet date is:

2024
2023
£
£


Repayable by instalments
3,806,446
3,891,211

3,806,446
3,891,211



Page 25

 
BEST QUALITY WATCHES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

21.


Loans


Analysis of the maturity of loans is given below:


2024
2023
£
£

Amounts falling due within one year

Bank loans
65,779
227,803

Other loans
780,000
2,916,800


845,779
3,144,603

Amounts falling due after one year

Bank loans
194,364
616,923

Other loans
3,806,446
3,891,211


4,000,810
4,508,134



4,846,589
7,652,737


There are two long-term loans which are secured by fixed and floating charges over the assets of the Company.
Interest is charged at 2.14% above base rate on one loan and for the other loan, a four-year fixed rate at 5.12% before reverting to 3.58% above the base rate.  The loans will be fully repaid by 2026 & 2028, respectively.


22.


Financial instruments

2024
2023
£
£

Financial assets


Financial assets measured at fair value through profit or loss
1,755,800
2,010,437




Financial assets measured at fair value through profit or loss.
Page 26

 
BEST QUALITY WATCHES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

23.


Deferred taxation




2024


£






At beginning of year
(65,645)


Charged to profit or loss
(34,238)



At end of year
(99,883)

The provision for deferred taxation is made up as follows:

2024
2023
£
£


Accelerated capital allowances
(124,051)
(218,528)

Tax losses carried forward
24,168
152,883

(99,883)
(65,645)


24.


Share capital

2024
2023
£
£
Allotted, called up and fully paid



20,000 (2023 - 20,000) Ordinary shares shares of £0.10 each
2,000
2,000





25.


Reserves

Share premium account

Share premium is the excess money received for issued shares above the par value.

Capital redemption reserve

Capital redemption reserve is a non-distributable reserve into which amounts are paid following a redemption or share buyback.

Profit and loss account

Profit and loss account is the accumulated profit/loss less any dividends declared.

Page 27

 
BEST QUALITY WATCHES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024

26.


Pension commitments

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.  The pension cost charge represents contributions payable by the Company  to the fund and amounted to £9,223 (2023 - £12,579) . Contributions totalling £2,801 (2023 - £1,911) were payable to the fund at the balance sheet date and are included in creditors.


27.


Commitments under operating leases

At 30 June 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2024
2023
£
£


Not later than 1 year
81,002
80,200

Later than 1 year and not later than 5 years
331,991
328,900

Later than 5 years
323,583
407,873

736,576
816,973


28.


Related party transactions

Remunderation of key management personnel is set out in Note 7 to these financial statements.
Dividends totalling £130,000 (2023: £130,000) were paid in the year in respect of shares held by the Company's director and close family member.
At the end of the year, £279,220 (2023: £414,746) was owed to the director of the Company and this is included in creditors. The interest charge for the year on this loan is £32,000 (2023: £32,000).
At the year end, an investor company which has an interest in the share capital of the company was owed £3,447,350 (2023: £3,469,950) by way of a formal loan. The interest charge for the year on this loan is £86,802 (2023: £86,310).  The ultimate controlling party of the investor company has separately provided a formal loan to the Company, which at the end of the year stood at £943,538 (2023: £943,538). The interest charge for the year on this loan is £86,802 (2023: £86,310).


29.


Controlling party

The ultimate controlling party is the director Spencer Dryer.
 
Page 28