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COMPANY REGISTRATION NUMBER: 11514565
Midwest Commodities Limited
Financial Statements
30 September 2024
Midwest Commodities Limited
Financial Statements
Year ended 30 September 2024
Contents
Page
Officers and professional advisers
1
Strategic report
2
Directors' report
4
Independent auditor's report to the members
7
Consolidated income statement
11
Consolidated statement of comprehensive income
12
Consolidated statement of financial position
13
Company statement of financial position
15
Consolidated statement of changes in equity
17
Company statement of changes in equity
18
Consolidated statement of cash flows
19
Notes to the financial statements
20
Midwest Commodities Limited
Officers and Professional Advisers
The board of directors
Muhammad Imran
Sajiv Kumar Damodaran Nair
Anamika Agarwal
Manish Joshi
Registered office
70 Gracechurch Street
London
England
EC3V 0HR
Auditor
Krish Jermyn Auditing Limited
Chartered Certified Accountants & Statutory Auditor
Maruti House
1st Floor
369 Station Road
Harrow
Middx
HA1 2AW
Bankers
Zenith Bank (UK) Limited
39, Cornhill
London
UK
EC3V 3ND
Santander Bank Plc
2 Triton Square
Regent's Place
London
NW1 3AN
Midwest Commodities Limited
Strategic Report
Year ended 30 September 2024
The directors present their Strategic report for the Group and Company for the period ended 30 September 2024.
Principal activities
The principal activity of the group is that of buying and selling commodities, manufacture and recycling of plastic packing materials.
Business review
The turnover of the group is £55.43 million compared to the previous period's turnover of £45.96 million. The margins have increased to 20% over the year due to the group having a bigger share of the market. The group achieved a satisfactory net profit before tax. The directors consider that the profit achieved on ordinary activities before taxation to be satisfactory. The trading results for the year and the group's financial position at the end of the year are shown in the attached financial statements. The company is in a good position to take advantage of business opportunities and the directors consider the state of affairs to be satisfactory.
Current trading
The group continues to make progress across all elements of its business.
Key performance indicators
The directors consider that the following key performance indicators are appropriate in terms of the assessment of the company's progress: - Growth in revenue - Achieving positive profit before tax - Securing new business opportunities for expansion - Financial arrangements for working capital and commodity financing - Diversifying and sourcing of raw materials and equipment
Principal risks and uncertainties
The group is subject to a number of risks, principally external, some of which could have a serious impact on the performance of the business. The risks that are particularly important at the current time are:- The company operates with thin margins, sourcing raw materials from new suppliers will have an impact on profitability; Selling to new customers increases the risk of default impacting the company financially; Financial risk e.g. impact of dependency on banks for working capital requirements. These risks are identified and managed through a regular dialogue and internal controls. Wherever possible the risks are closely monitored and appropriate safeguards put in place to minimise the risks.
Future developments
The directors anticipate that the business environment will remain even more competitive due to the impacts of the high interest rates, high inflation, increased cost of living and the consequential fall in consumer spending. However, they believe that the group is in sound financial position and they remain confident that the group and its brands will bounce back in the foreseeable future. To revive the business directors have authorised an increased investments in the group's research and development, logistics infrastructure.
Research and development
The group has currently put in place a perpetual improvement process to undertake research and development with the view to improving the performance of its two licensed brands and to enhance its product offers and to maintain its market edge over its competition. Investing on innovation and embracing future technologies are considered by the board as paramount.
This report was approved by the board of directors on 30 June 2025 and signed on behalf of the board by:
Muhammad Imran
Director
Registered office:
70 Gracechurch Street
London
England
EC3V 0HR
Midwest Commodities Limited
Directors' Report
Year ended 30 September 2024
The directors present their report and the financial statements of the group for the year ended 30 September 2024 .
Principal activities
The principal activity of the group is that of buying and selling commodities, manufacture and recycling of plastic packing materials.
Directors
The directors who served the company during the year were as follows:
Muhammad Imran
Sajiv Kumar Damodaran Nair
Anamika Agarwal
Manish Joshi
Dividends
The directors do not recommend the payment of a dividend.
Future developments
The company is expanding its business to other European countries.
Employment of disabled persons
The group operates an equal opportunities policy. The aim of this policy is to ensure that there should be equal opportunity for all and this applies to external recruitment and internal appointments, terms of employment, conditions of service and opportunity for training and promotion regardless of age, gender, ethnic origin or disability. Disabled persons are given full and fair consideration for all types of vacancy in as much as the opportunities available are constrained by the practical limitations of the disability. Should for whatever reason, an employee of the Group become disabled whilst in employment, every step, where appropriate, will be taken to (i) assist with rehabilitation and ii) arrange suitable retraining. The Group maintains its own health, safety and environmental policies covering all aspects of its operations. Regular meetings and inspections take place to ensure all legal requirements are adhered to and that the Group is responsible for the needs of the employees and the environment.
Employee involvement
Within the bounds of commercial confidentiality, the Group endeavours to keep staff at all levels informed of matters that affect the progress of the Group and are of interest to them as employees.
Financial instruments
The period of unprecedented market pressures on consumers continues as did falling demand for the luxury and branded goods.
Continued market conditions and currency fluctuation in input costs and intense competition can adversely impact the growth and profitability as well as capability to execute long term plans.
In the current highly competitive and volatile market, the group continues to pursue strategies to explore new streams of revenue. The directors expect the environment to remain highly competitive in 2023/2024 but are confident that the group is well positioned to deal with such market risks and challenges.
Competition, market volatility, economic condition and currency fluctuations remain the principal risk and the group has implemented programs to increase efficiency in logistics and raise the standard of service in order to maintain its strong market position. Management is constantly striving to reduce base costs and improve its profit margin.
Foreign exchange exposure is a risk area with the products purchased and sold in various currencies. However, the group mitigates these risks by utilising its forward currency booking options.
Recoverability of trade debts is a risk in the current economic climate and the group constantly monitors its customers' credit worthiness and credit insures them.
Due to the straightforward nature of the business, the directors are of the opinion that analysis using key performance indicators is not necessary for an understanding of the development, performance or position of the business.
Events after the end of the reporting period
The adverse economic, social, infrastructure and financial impacts in the world and the industry are the important factors to mention as the post balance sheet events.
Disclosure of information in the strategic report
The company has chosen in accordance with s.414C(11) Companies Act 2006 to set out in the company's strategic report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the directors' report.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, 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 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 group and the company and the profit or loss of the group for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgments and accounting estimates that are reasonable and prudent. 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. Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the group and the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the group and the company's auditor is aware of that information. A resolution to reappoint Krish Jermyn Auditing Limited as auditors will be proposed at the forthcoming Annual General Meeting.
This report was approved by the board of directors on 30 June 2025 and signed on behalf of the board by:
Muhammad Imran
Director
Registered office:
70 Gracechurch Street
London
England
EC3V 0HR
Midwest Commodities Limited
Independent Auditor's Report to the Members of Midwest Commodities Limited
Year ended 30 September 2024
Opinion
We have audited the financial statements of Midwest Commodities Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2024 which comprise the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of financial position, company statement of financial position, consolidated statement of changes in equity, company statement of changes in equity, consolidated statement of cash flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 group's and of the parent company's affairs as at 30 September 2024 and of the group's profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - 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 auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's or the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. 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. In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 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 group and the parent 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or - the parent company 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, 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 group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: - Enquiry of management and those charged with governance around actual and potential litigation and cliams; - Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias. - Reviewing minutes of meetings of those charged with governance; - Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations. 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/auditors responsibilities. This description forms part of our auditor's report. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group's internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's or the parent company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. - Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Use of our report
This report is made solely to the company's members, as a body, in accordance with chapter 3 of part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Sailesh Rameshchandra Vaghjee
(Senior Statutory Auditor)
For and on behalf of
Krish Jermyn Auditing Limited
Chartered Certified Accountants & Statutory Auditor
Maruti House
1st Floor
369 Station Road
Harrow
Middx
HA1 2AW
30 June 2025
Midwest Commodities Limited
Consolidated Income Statement
Year ended 30 September 2024
2024
2023
Note
£
£
Turnover
4
59,372,848
55,436,114
Cost of sales
53,692,372
50,404,328
-------------
-------------
Gross profit
5,680,476
5,031,786
Administrative expenses
5,914,696
5,204,042
------------
------------
Operating loss
5
( 234,220)
( 172,256)
Interest payable and similar expenses
9
134,772
8,578
------------
------------
Loss before taxation
( 368,992)
( 180,834)
Tax on loss
10
( 803,920)
696,411
---------
---------
Profit/(loss) for the financial year
434,928
( 877,245)
---------
---------
All the activities of the group are from continuing operations.
Midwest Commodities Limited
Consolidated Statement of Comprehensive Income
Year ended 30 September 2024
2024
2023
£
£
Profit/(loss) for the financial year
468,959
(1,051,043)
Share of profit of non controlling interest
(34,031)
173,798
---------
------------
Other comprehensive income for the year
( 34,031)
173,798
---------
------------
Total comprehensive income for the year
434,928
( 877,245)
---------
------------
Total comprehensive income for the year attributable to:
The owners of the parent company
400,897
( 703,447)
Non-controlling interests
34,031
( 173,798)
---------
---------
434,928
( 877,245)
---------
---------
Midwest Commodities Limited
Consolidated Statement of Financial Position
30 September 2024
2024
2023
Note
£
£
Fixed assets
Intangible assets
11
2,838,431
3,784,575
Tangible assets
12
6,874,132
7,287,223
------------
-------------
9,712,563
11,071,798
Current assets
Stocks
14
8,466,297
3,839,381
Debtors
15
11,921,976
11,208,109
Cash at bank and in hand
196,426
191,196
-------------
-------------
20,584,699
15,238,686
Prepayments and accrued income
147,886
45,668
Creditors: amounts falling due within one year
Bank loans and overdrafts
4,714,390
Payments received on account
45,132
45,132
Trade creditors
9,978,950
10,761,685
Other creditors including taxation and social security
16
1,501,712
1,690,819
-------------
-------------
16,240,184
12,497,636
-------------
-------------
Net current assets
4,492,401
2,786,718
-------------
-------------
Total assets less current liabilities
14,204,964
13,858,516
Creditors: amounts falling due after more than one year
Other creditors including taxation and social security
17
5,616,066
5,649,282
Provisions
19
1,287,478
1,355,807
Accruals and deferred income
65,184
52,119
-------------
-------------
Net assets
7,236,236
6,801,308
-------------
-------------
Capital and reserves
Called up share capital
23
7,959,962
7,959,962
Profit and loss account
24
( 691,340)
( 1,092,237)
------------
------------
Equity attributable to the owners of the parent company
7,268,622
6,867,725
Non-controlling interests
( 32,386)
( 66,417)
------------
------------
7,236,236
6,801,308
------------
------------
Midwest Commodities Limited
Consolidated Statement of Financial Position (continued)
30 September 2024
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the medium companies regime.
These financial statements were approved by the board of directors and authorised for issue on 30 June 2025 , and are signed on behalf of the board by:
Muhammad Imran
Director
Company registration number: 11514565
Midwest Commodities Limited
Company Statement of Financial Position
30 September 2024
2024
2023
Note
£
£
Fixed assets
Tangible assets
12
156,701
90,785
Investments
13
608,491
608,491
---------
---------
765,192
699,276
Current assets
Debtors
15
21,364,985
20,836,428
Cash at bank and in hand
11,648
17,538
-------------
-------------
21,376,633
20,853,966
Creditors: amounts falling due within one year
Payments received on account
45,132
45,132
Trade creditors
6,738,688
6,388,794
Other creditors including taxation and social security
16
831,840
834,211
-------------
-------------
7,615,660
7,268,137
-------------
-------------
Net current assets
13,760,973
13,585,829
-------------
-------------
Total assets less current liabilities
14,526,165
14,285,105
Creditors: amounts falling due after more than one year
Other creditors including taxation and social security
17
5,555,933
5,551,781
Provisions
19
34,478
17,249
Accruals and deferred income
28,625
17,000
-------------
-------------
Net assets
8,907,129
8,699,075
-------------
-------------
Capital and reserves
Called up share capital
23
7,959,962
7,959,962
Profit and loss account
24
947,167
739,113
------------
------------
Shareholders funds
8,907,129
8,699,075
------------
------------
The profit for the financial year of the parent company was £ 208,054 (2023: £ 273,628 ).
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the medium companies regime.
Midwest Commodities Limited
Company Statement of Financial Position (continued)
30 September 2024
These financial statements were approved by the board of directors and authorised for issue on 30 June 2025 , and are signed on behalf of the board by:
Muhammad Imran
Director
Company registration number: 11514565
Midwest Commodities Limited
Consolidated Statement of Changes in Equity
Year ended 30 September 2024
Called up share capital
Profit and loss account
Equity attributable to the owners of the parent company
Non-controlling interests
Total
£
£
£
£
£
At 1 October 2022
7,959,962
( 388,790)
7,571,172
7,571,172
Loss for the year
( 877,245)
( 877,245)
( 173,798)
(1,051,043)
Other comprehensive income for the year:
Share of profit of non controlling interest
173,798
173,798
173,798
------------
---------
------------
---------
------------
Total comprehensive income for the year
( 703,447)
( 703,447)
( 173,798)
( 877,245)
Issue of shares
107,381
107,381
------------
---------
------------
---------
------------
Total investments by and distributions to owners
107,381
107,381
At 30 September 2023
7,959,962
( 1,092,237)
6,867,725
( 66,417)
6,801,308
Profit for the year
434,928
434,928
34,031
468,959
Other comprehensive income for the year:
Share of profit of non controlling interest
(34,031)
(34,031)
(34,031)
------------
------------
------------
---------
------------
Total comprehensive income for the year
400,897
400,897
34,031
434,928
------------
------------
------------
---------
------------
At 30 September 2024
7,959,962
( 691,340)
7,268,622
( 32,386)
7,236,236
------------
------------
------------
---------
------------
Midwest Commodities Limited
Company Statement of Changes in Equity
Year ended 30 September 2024
Called up share capital
Profit and loss account
Total
£
£
£
At 1 October 2022
7,959,962
465,485
8,425,447
Profit for the year
273,628
273,628
------------
---------
------------
Total comprehensive income for the year
273,628
273,628
At 30 September 2023
7,959,962
739,113
8,699,075
Profit for the year
208,054
208,054
------------
---------
------------
Total comprehensive income for the year
208,054
208,054
------------
---------
------------
At 30 September 2024
7,959,962
947,167
8,907,129
------------
---------
------------
Midwest Commodities Limited
Consolidated Statement of Cash Flows
Year ended 30 September 2024
2024
2023
£
£
Cash flows from operating activities
Profit/(loss) for the financial year
434,928
(877,245)
Adjustments for:
Depreciation of tangible assets
657,155
701,285
Amortisation of intangible assets
946,144
946,144
Interest payable and similar expenses
134,772
8,578
Loss on disposal of tangible assets
3,650
Tax on profit
( 803,920)
696,411
Accrued expenses/(income)
13,064
( 26,385)
Changes in:
Stocks
( 4,626,916)
( 1,053,103)
Trade and other debtors
( 816,085)
( 1,590,890)
Trade and other creditors
( 1,162,831)
131,140
------------
------------
Cash generated from operations
( 5,223,689)
( 1,060,415)
Interest paid
( 134,772)
( 8,578)
Tax received/(paid)
988,255
( 35,125)
------------
------------
Net cash used in operating activities
( 4,370,206)
( 1,104,118)
------------
------------
Cash flows from investing activities
Purchase of tangible assets
( 244,063)
( 331,187)
Proceeds from sale of tangible assets
10,750
------------
------------
Net cash used in investing activities
( 244,063)
( 320,437)
------------
------------
Cash flows from financing activities
Proceeds from disposal of shares
107,381
Proceeds from borrowings
4,714,390
14,400
Payments of finance lease liabilities
( 94,891)
( 53,939)
------------
------------
Net cash from financing activities
4,619,499
67,842
------------
------------
Net increase/(decrease) in cash and cash equivalents
5,230
( 1,356,713)
Cash and cash equivalents at beginning of year
191,196
1,547,909
---------
------------
Cash and cash equivalents at end of year
196,426
191,196
---------
------------
Midwest Commodities Limited
Notes to the Financial Statements
Year ended 30 September 2024
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is 70 Gracechurch Street, London, EC3V 0HR, England.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Going concern
In preparing the financial statements the directors have taken into account all the information that could reasonably be expected to be available together with their continued support The company is dependent on the availability of orders and the current economic conditions are having significant impact and the conditions remain challenging. The board consider that the company will have sufficient future orders to maintain its profitability. The directors have reasonable expectations and adequate resources that the company will be able to continue in operations and meet its liabilities as they fall due. On this basis the financial statements have been prepared by using the going concern basis of accounting because there are no material uncertainties related to events and conditions that may cast significant doubt about the ability of the company to continue as a going concern.
Disclosure exemptions
The parent company satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following reduced disclosures available under FRS 102:
(a) Disclosures in respect of each class of share capital have not been presented.
(b) No cash flow statement has been presented for the company.
(c) Disclosures in respect of financial instruments have not been presented.
(d) No disclosure has been given for the aggregate remuneration of key management personnel.
Consolidation
The financial statements consolidate the financial statements of Midwest Commodities Limited and all of its subsidiary undertakings.
The results of subsidiaries acquired or disposed of during the year are included from or to the date that control passes.
The parent company has applied the exemption contained in section 408 of the Companies Act 2006 and has not presented its individual profit and loss account.
Non-controlling interests
Minority interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity. Minority interests consist of the amount of those interests at the date of the original business combination and the minority’s share of changes in equity since the date of the combination.
The proportions of profit or loss and changes in equity allocated to the owners of the parent and to the minority interests are determined on the basis of existing ownership interests and do not reflect the possible exercise or conversion of options or convertible instruments.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Foreign currencies
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the profit and loss account.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Intangible assets
Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses. Any intangible assets carried at revalued amounts, are recorded at the fair value at the date of revaluation, as determined by reference to an active market, less any subsequent accumulated amortisation and subsequent accumulated impairment losses. Intangible assets acquired as part of a business combination are only recognised separately from goodwill when they arise from contractual or other legal rights, are separable, the expected future economic benefits are probable and the cost or value can be measured reliably.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
Development costs
-
20% straight line
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Research and development
Research expenditure is written off in the period in which it is incurred. Development expenditure incurred is capitalised as an intangible asset only when all of the following criteria are met: - It is technically feasible to complete the intangible asset so that it will be available for use or sale; - There is the intention to complete the intangible asset and use or sell it; - There is the ability to use or sell the intangible asset; - The use or sale of the intangible asset will generate probable future economic benefits; - There are adequate technical, financial and other resources available to complete the development and to use or sell the intangible asset; and - The expenditure attributable to the intangible asset during its development can be measured reliably. Expenditure that does not meet the above criteria is expensed as incurred.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Plant and machinery
-
10% reducing balance
Fixtures and fittings
-
15% reducing balance
Motor vehicles
-
25% straight line
Investments
Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.
Listed investments are measured at fair value with changes in fair value being recognised in profit or loss.
Investments in associates
Investments in associates are accounted for using the equity method of accounting, whereby the investment is initially recognised at the transaction price and subsequently adjusted to reflect the group's share of the profit or loss, other comprehensive income and equity of the associate.
Investments in joint ventures
Investments in joint ventures are accounted for using the equity method of accounting, whereby the investment is initially recognised at the transaction price and subsequently adjusted to reflect the group's share of the profit or loss, other comprehensive income and equity of the joint venture.
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
Financial instruments
A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Debt instruments are subsequently measured at amortised cost. Where investments in non-convertible preference shares and non-puttable ordinary shares or preference shares are publicly traded or their fair value can otherwise be measured reliably, the investment is subsequently measured at fair value with changes in fair value recognised in profit or loss. All other such investments are subsequently measured at cost less impairment. Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Other financial instruments are subsequently measured at fair value, with any changes recognised in profit or loss, with the exception of hedging instruments in a designated hedging relationship.
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
4. Turnover
Turnover arises from:
2024
2023
£
£
Sale of goods
59,372,848
55,436,114
-------------
-------------
The whole of the turnover is attributable to the principal activity of the group wholly undertaken in the United Kingdom.
5. Operating profit
Operating profit or loss is stated after charging/crediting:
2024
2023
£
£
Amortisation of intangible assets
946,144
946,144
Depreciation of tangible assets
657,155
701,285
Impairment of intangible assets recognised in:
Administrative expenses
107,381
Loss on disposal of tangible assets
3,650
Operating lease rentals
3,452
3,741
Foreign exchange differences
( 41,078)
31,266
---------
---------
6. Auditor's remuneration
2024
2023
£
£
Fees payable for the audit of the financial statements
25,100
21,000
--------
--------
7. Staff costs
The average number of persons employed by the group during the year, including the directors, amounted to:
2024
2023
No.
No.
Production staff
28
24
Management staff
3
3
Administrative
18
18
Maintenance
14
14
Sales
4
4
----
----
67
63
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2024
2023
£
£
Wages and salaries
1,908,815
1,935,761
Social security costs
194,987
200,976
Other pension costs
8,496
15,434
------------
------------
2,112,298
2,152,171
------------
------------
8. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
2024
2023
£
£
Remuneration
145,304
146,239
---------
---------
9. Interest payable and similar expenses
2024
2023
£
£
Interest on obligations under finance leases and hire purchase contracts
13,863
8,578
Other interest payable and similar charges
120,909
---------
-------
134,772
8,578
---------
-------
10. Tax on profit
Major components of tax (income)/expense
2024
2023
£
£
Current tax:
UK current tax expense
254,906
284,665
Adjustments in respect of prior periods
( 990,497)
---------
---------
Total current tax
( 735,591)
284,665
---------
---------
Deferred tax:
Origination and reversal of timing differences
( 68,329)
411,746
---------
---------
Tax on profit
( 803,920)
696,411
---------
---------
Reconciliation of tax (income)/expense
The tax assessed on the loss on ordinary activities for the year is lower than (2023: higher than) the standard rate of corporation tax in the UK of 25 % (2023: 22.01 %).
2024
2023
£
£
Loss on ordinary activities before taxation
( 368,992)
( 180,834)
---------
---------
Loss on ordinary activities by rate of tax
( 92,248)
( 23,898)
Adjustment to tax charge in respect of prior periods
(247,624)
Effect of expenses not deductible for tax purposes
339,504
Effect of capital allowances and depreciation
( 532,377)
( 67,872)
Effect of revenue exempt from tax
68,329
448,677
---------
---------
Tax on profit
( 803,920)
696,411
---------
---------
11. Intangible assets
Group
Development costs
£
Cost
At 1 October 2023 and 30 September 2024
4,730,719
------------
Amortisation
At 1 October 2023
946,144
Charge for the year
946,144
------------
At 30 September 2024
1,892,288
------------
Carrying amount
At 30 September 2024
2,838,431
------------
At 30 September 2023
3,784,575
------------
The company has no intangible assets.
12. Tangible assets
Group
Freehold property
Plant and machinery
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 October 2023
1,112,087
7,406,493
170,508
38,717
8,727,805
Additions
208,224
2,649
33,190
244,063
------------
------------
---------
--------
------------
At 30 September 2024
1,112,087
7,614,717
173,157
71,907
8,971,868
------------
------------
---------
--------
------------
Depreciation
At 1 October 2023
1,383,353
43,761
13,467
1,440,581
Charge for the year
623,136
19,409
14,610
657,155
------------
------------
---------
--------
------------
At 30 September 2024
2,006,489
63,170
28,077
2,097,736
------------
------------
---------
--------
------------
Carrying amount
At 30 September 2024
1,112,087
5,608,228
109,987
43,830
6,874,132
------------
------------
---------
--------
------------
At 30 September 2023
1,112,087
6,023,140
126,747
25,250
7,287,224
------------
------------
---------
--------
------------
Company
Plant and machinery
Motor vehicles
Total
£
£
£
Cost
At 1 October 2023
100,872
100,872
Additions
66,670
19,990
86,660
---------
--------
---------
At 30 September 2024
167,542
19,990
187,532
---------
--------
---------
Depreciation
At 1 October 2023
10,087
10,087
Charge for the year
15,746
4,998
20,744
---------
--------
---------
At 30 September 2024
25,833
4,998
30,831
---------
--------
---------
Carrying amount
At 30 September 2024
141,709
14,992
156,701
---------
--------
---------
At 30 September 2023
90,785
90,785
---------
--------
---------
13. Investments
The group has no investments.
Company
Shares in group undertakings
£
Cost
At 1 October 2023 and 30 September 2024
608,491
---------
Impairment
At 1 October 2023 and 30 September 2024
---------
Carrying amount
At 1 October 2023 and 30 September 2024
608,491
---------
At 30 September 2023
608,491
---------
Subsidiaries, associates and other investments
Details of the investments in which the parent company has an interest of 20% or more are as follows:
Class of share
Percentage of shares held
Subsidiary undertakings
Midwest Polychem Limited
Ordinary
85
14. Stocks
Group
Company
2024
2023
2024
2023
£
£
£
£
Raw materials and consumables
8,466,297
3,839,381
------------
------------
----
----
15. Debtors
Group
Company
2024
2023
2024
2023
£
£
£
£
Trade debtors
11,458,073
10,684,761
4,535,182
6,215,918
Amounts owed by group undertakings
16,696,279
14,494,660
Other debtors
463,903
523,348
133,524
125,850
-------------
-------------
-------------
-------------
11,921,976
11,208,109
21,364,985
20,836,428
-------------
-------------
-------------
-------------
16. Other creditors including taxation and social security falling
due within one year
Group
Company
2024
2023
2024
2023
£
£
£
£
Corporation tax
562,329
309,665
173,084
116,637
Social security and other taxes
105,071
519,660
3,722
4,341
Obligations under finance leases
46,075
107,750
8,707
70,387
Director loan accounts
14,400
14,400
Other creditors
773,837
739,344
646,327
642,846
------------
------------
---------
---------
1,501,712
1,690,819
831,840
834,211
------------
------------
---------
---------
17. Other creditors including taxation and social security falling
due after more than one year
Group
Company
2024
2023
2024
2023
£
£
£
£
Obligations under finance leases
71,844
105,060
11,711
7,559
Other creditors
5,544,222
5,544,222
5,544,222
5,544,222
------------
------------
------------
------------
5,616,066
5,649,282
5,555,933
5,551,781
------------
------------
------------
------------
Midwest Commodities Limited has provided a cross guarantee for the assets held by the subsidiary company Midwest Polychem Ltd Other creditors include a shareholders loan of £5,544,222
18. Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
Group
Company
2024
2023
2024
2023
£
£
£
£
Not later than 1 year
46,075
107,750
8,707
70,387
Later than 1 year and not later than 5 years
71,844
105,060
11,711
7,559
---------
---------
--------
--------
117,919
212,810
20,418
77,946
---------
---------
--------
--------
19. Provisions
Group
Deferred tax (note 20)
£
At 1 October 2023
1,355,807
Additions
( 68,329)
------------
At 30 September 2024
1,287,478
------------
Company
Deferred tax (note 20)
£
At 1 October 2023
17,249
Additions
17,229
--------
At 30 September 2024
34,478
--------
20. Deferred tax
The deferred tax included in the statement of financial position is as follows:
Group
Company
2024
2023
2024
2023
£
£
£
£
Included in provisions (note 19)
1,287,478
1,355,807
34,478
17,249
------------
------------
--------
--------
The deferred tax account consists of the tax effect of timing differences in respect of:
Group
Company
2024
2023
2024
2023
£
£
£
£
Accelerated capital allowances
1,287,478
1,355,807
1,287,478
1,355,807
------------
------------
------------
------------
21. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 8,496 (2023: £ 15,434 ).
22. Financial instruments
Financial instruments carried on the statement of financial position include cash and cash equivalents, borrowings and accruals. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item
23. Called up share capital
Issued, called up and fully paid
2024
2023
No.
£
No.
£
Ordinary shares of £ 0.79164 each
2,500,000
1,979,100
2,500,000
1,979,100
Ordinary shares of £ 1 each
2
2
2
2
Ordinary shares of £ 0.797448 each
7,500,000
5,980,860
7,500,000
5,980,860
-------------
------------
-------------
------------
10,000,002
7,959,962
10,000,002
7,959,962
-------------
------------
-------------
------------
Called up share capital represents the nominal value of share that have been issued.
24. Reserves
Profit and loss account - This reserve records retained earnings and accumulated losses.
25. Analysis of changes in net debt
At 1 Oct 2023
Cash flows
At 30 Sep 2024
£
£
£
Cash at bank and in hand
191,196
5,230
196,426
Debt due within one year
(122,150)
(4,652,715)
(4,774,865)
Debt due after one year
(105,060)
33,216
(71,844)
---------
------------
------------
( 36,014)
( 4,614,269)
( 4,650,283)
---------
------------
------------
Midwest Commodities Limited
Notes to the Financial Statements (continued)
Year ended 30 September 2024
26. Directors' advances, credits and guarantees
During the year the directors entered into the following advances and credits with the company and its subsidiary undertakings:
2024
Balance brought forward
Advances/ (credits) to the directors
Balance outstanding
£
£
£
Muhammad Imran
( 14,400)
( 14,400)
--------
----
--------
2023
Balance brought forward
Advances/ (credits) to the directors
Balance outstanding
£
£
£
Muhammad Imran
( 14,400)
( 14,400)
----
--------
--------
27. Related party transactions
Group
During the year the company had transactions with companies within the group. All transactions have been carried out on an arm's length basis and ordinary course of business.
Company
During the year the company entered into the following transactions with related parties:
Transaction value
Balance owed by/(owed to)
2024
2023
2024
2023
£
£
£
£
Midwest Polychem Limited
16,696,279
14,494,660
( 16,696,279)
( 14,494,660)
-------------
-------------
-------------
-------------
At the period end the company owes the subsidiary a balance of £14,494,660. All transaction have been carried out at arms length basis.
28. Controlling party
During the year, the company was controlled jointly by the directors.