Company registration number 03730070 (England and Wales)
MARK WORTHINGTON JEWELLERS LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023
MARK WORTHINGTON JEWELLERS LTD
CONTENTS
Page
Company information
1
Strategic report
2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Statement of income and retained earnings
9
Balance sheet
10
Statement of cash flows
11
Notes to the financial statements
12 - 21
MARK WORTHINGTON JEWELLERS LTD
COMPANY INFORMATION
- 1 -
Directors
Mr C M D Worthington
Mr T Worthington
Mr H Worthington
Company number
03730070
Registered office
23 Water Lane
Wilmslow
Cheshire
UK
SK9 5AE
Auditor
Sadofskys
Statutory Auditors
Princes House
Wright Street
Hull
East Yorkshire
HU2 8HX
MARK WORTHINGTON JEWELLERS LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 30 APRIL 2023
- 2 -
The directors present the strategic report for the year ended 30 April 2023.
Review of the business
Turnover has been in line with expectations and margins are competitive with our competitors. We remain focussed on increasing both turnover and profit. The prices of our offering is based on market values and managed by maintaining and growing stockholding alongside constant monitoring and exceptional knowledge of the market.
The key performance indicators which the company relies upon is its Turnover and Profit before tax. The Turnover of £7,816,799 was down by 43% and the profit before tax of £219,939 down by 85%. This was a reflection of market changes due to the current UK economic conditions which has severely squeezed the public’s available funds for purchasing luxury items.
Principal risks and uncertainties
The director has minimised any risks by not giving credit, holding significant cash reserves and not exposing the company to foreign exchange risks. They do not view any particular risks and uncertainties to be currently facing the company but recognise the current economic conditions in which the company will be trading.
Given that the company has navigated through the recent unforeseen restrictions imposed upon it with very little if any financial impact the director is confident that the company will continue to prosper. The director doesn't believe that there will be any significant future developments in the business.
Mr C M D Worthington
Director
29 January 2024
MARK WORTHINGTON JEWELLERS LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 APRIL 2023
- 3 -
The directors present their annual report and financial statements for the year ended 30 April 2023.
Principal activities
The principal activity of the company continued to be that of retail jewellers, with an online presence selling fine jewellery and premium brand new and preowned watches.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £1,688,000 (2022 £2,066,000). The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr C M D Worthington
Mr T Worthington
Mr H Worthington
Financial instruments
Financial instrument risk
The financial risk management objective of the business is to ensure that sufficient cash is generated in order to enable the business to continue to trade profitably in the long term.
Price risk, credit risk, liquidity risk and cash flow risk
The business holds solid cash-flow reserves in order to manage and maintain any risks.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr C M D Worthington
Director
29 January 2024
MARK WORTHINGTON JEWELLERS LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 APRIL 2023
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
MARK WORTHINGTON JEWELLERS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MARK WORTHINGTON JEWELLERS LTD
- 5 -
Opinion
We have audited the financial statements of Mark Worthington Jewellers Ltd (the 'company') for the year ended 30th April 2023 which comprise the Statement of Income and Retained Earnings, Balance Sheet, Statement of Cash Flows and Notes to the Financial Statements, 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 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 30th April 2023;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
- Practice; and
- have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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 UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Directors' Report, but does not include the financial statements and our Auditors' Report thereon.
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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of 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.
MARK WORTHINGTON JEWELLERS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MARK WORTHINGTON JEWELLERS LTD
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of directors' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors' Responsibilities Statement, 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 necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
MARK WORTHINGTON JEWELLERS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MARK WORTHINGTON JEWELLERS LTD
- 7 -
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 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.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
- we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the jewellery industry;
- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, UK taxation legislation, and data protection, anti-bribery, employment, environmental, and health and safety legislation, along with industry specific regulations and requirements;
- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
- identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
- performed analytical procedures to identify any unusual or unexpected relationships;
- tested journal entries to identify unusual transactions;
- assessed whether judgements and assumptions made in determining accounting estimates were indicative of potential bias; and
- investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
- agreeing financial statement disclosures to underlying supporting documentation;
- reading the minutes of meetings of those charged with governance;
- enquiring of management as to actual and potential litigation and claims; and
- reviewing correspondence with HMRC, relevant regulators and the company's legal advisors.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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.
MARK WORTHINGTON JEWELLERS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MARK WORTHINGTON JEWELLERS LTD
- 8 -
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 a Report of the Auditors 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.
Alan Brocklehurst (Senior Statutory Auditor)
For and on behalf of Sadofskys, Statutory Auditors
29 January 2024
Princes House
Wright Street
Hull
East Yorkshire
HU2 8HX
MARK WORTHINGTON JEWELLERS LTD
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 30 APRIL 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
7,816,799
13,743,068
Cost of sales
(6,788,959)
(11,440,682)
Gross profit
1,027,840
2,302,386
Administrative expenses
(585,716)
(607,616)
Other operating income
20,037
Operating profit
4
442,124
1,714,807
Interest receivable and similar income
7
14,601
Interest payable and similar expenses
8
(236,786)
(199,936)
Profit before taxation
219,939
1,514,871
Tax on profit
10
(43,156)
(291,262)
Profit for the financial year
176,783
1,223,609
Retained earnings brought forward
6,389,916
7,232,307
Dividends
11
(1,688,000)
(2,066,000)
Retained earnings carried forward
4,878,700
6,389,916
The profit and loss account has been prepared on the basis that all operations are continuing operations.
MARK WORTHINGTON JEWELLERS LTD
BALANCE SHEET
AS AT
30 APRIL 2023
30 April 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investment property
13
1,200,800
498,368
Current assets
Stocks
14
4,631,133
5,782,845
Debtors
15
46,793
15,451
Cash at bank and in hand
2,335,755
3,200,300
7,013,681
8,998,596
Creditors: amounts falling due within one year
16
(3,334,771)
(3,106,038)
Net current assets
3,678,910
5,892,558
Net assets
4,879,710
6,390,926
Capital and reserves
Called up share capital
18
1,010
1,010
Profit and loss reserves
4,878,700
6,389,916
Total equity
4,879,710
6,390,926
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true
The financial statements were approved by the board of directors and authorised for issue on 29 January 2024 and are signed on its behalf by:
Mr C M D Worthington
Director
Company registration number 03730070 (England and Wales)
MARK WORTHINGTON JEWELLERS LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 APRIL 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
21
1,496,444
993,571
Interest paid
-
(39,987)
Income taxes paid
(291,262)
(221,568)
Net cash inflow from operating activities
1,205,182
732,016
Investing activities
Purchase of investment property
(702,432)
(505,957)
Interest received
14,499
Net cash used in investing activities
(687,933)
(505,957)
Financing activities
Proceeds/(repayment) from borrowings
from Directors and connected persons
(1,111,999)
(161,033)
Net cash used in financing activities
(1,111,999)
(161,033)
Net increase/(decrease) in cash and cash equivalents
(594,750)
65,026
Cash and cash equivalents at beginning of year
2,854,782
2,789,756
Cash and cash equivalents at end of year
2,260,032
2,854,782
Relating to:
Cash at bank and in hand
2,335,755
3,200,300
Bank overdrafts included in creditors payable within one year
(75,723)
(345,518)
MARK WORTHINGTON JEWELLERS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023
- 12 -
1
Accounting policies
Company information
MARK WORTHINGTON JEWELLERS LTD is a private company limited by shares incorporated in England and Wales. The registered office is 23 Water Lane, Wilmslow, Cheshire, UK, SK9 5AE.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures, fittings & equipment
10% on cost
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
MARK WORTHINGTON JEWELLERS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 13 -
1.5
Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
MARK WORTHINGTON JEWELLERS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 14 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
MARK WORTHINGTON JEWELLERS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 15 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
MARK WORTHINGTON JEWELLERS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 16 -
1.14
Government grants
Other operating income in the profit and loss account includes government grants received or receivable in respect of the Coronavirus Job Retention Scheme (CJRS) and the council support grants. These grants relate to revenue and are measured at the fair value of the asset received or receivable. They are accounted for on the accrual model so are recognised in income on a systematic basis over the periods in which the entity recognises the related wage costs for which the grant is intended to compensate.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sale of Goods
7,816,799
13,743,068
2023
2022
£
£
Other revenue
Interest income
14,601
-
Grants received
-
20,037
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
-
(20,037)
Fees payable to the company's auditor for the audit of the company's financial statements
8,500
10,000
Depreciation of owned tangible fixed assets
-
22,089
Operating lease charges
29,511
28,653
MARK WORTHINGTON JEWELLERS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 17 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administration
2
2
Sales
9
9
Total
11
11
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
234,119
259,856
Social security costs
17,254
17,007
Pension costs
21,326
15,892
272,699
292,755
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
83,849
68,999
Company pension contributions to defined contribution schemes
6,488
5,431
90,337
74,430
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
14,499
Other interest income
102
Total income
14,601
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
14,499
MARK WORTHINGTON JEWELLERS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 18 -
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
236,786
199,936
9
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
21,326
15,892
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.
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
43,156
291,262
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
219,939
1,514,871
Expected tax charge based on the standard rate of corporation tax in the UK of 19.50% (2022: 19.00%)
42,888
287,825
Tax at marginal rate
(34)
Depreciation in excess of Capital Allowances
(635)
3,479
Tax effect of expenses that are not deductible in determining taxable profit
937
(42)
Taxation charge for the year
43,156
291,262
11
Dividends
2023
2022
£
£
Interim paid
1,688,000
2,066,000
MARK WORTHINGTON JEWELLERS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 19 -
12
Tangible fixed assets
Fixtures, fittings & equipment
£
Cost
At 1 May 2022 and 30 April 2023
411,134
Depreciation and impairment
At 1 May 2022 and 30 April 2023
411,134
Carrying amount
At 30 April 2023
At 30 April 2022
13
Investment property
2023
£
Fair value
At 1 May 2022
498,368
Additions through external acquisition
702,432
At 30 April 2023
1,200,800
Investment properties have not been revalued as they have only just been acquired and the market value is felt to be in line with the acquisition price.
14
Stocks
2023
2022
£
£
Finished goods and goods for resale
4,631,133
5,782,845
15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Other debtors
1,000
1,000
Prepayments and accrued income
45,793
14,451
46,793
15,451
MARK WORTHINGTON JEWELLERS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 20 -
16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
17
75,723
345,518
Trade creditors
38,227
74,401
Corporation tax
43,156
291,262
Other taxation and social security
50,010
103,245
Other creditors
3,116,355
2,281,609
Accruals and deferred income
11,300
10,003
3,334,771
3,106,038
The bank overdraft is secured by a specific equitable charge over all the freehold and leasehold assets of the company.
17
Loans and overdrafts
2023
2022
£
£
Bank overdrafts
75,723
345,518
Payable within one year
75,723
345,518
18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Allotted, issued and fully paid
Ordinary shares of £1 each
1,000
1,000
1,000
1,000
Ordinary B shares of £1 each
5
5
5
5
Ordinary C shares of £1 each
5
5
5
5
1,010
1,010
1,010
1,010
The Ordinary shares hold the voting rights and have no restrictions placed upon them.
The Ordinary B and Ordinary C shares are non-voting shares with the rights to receiving distributions.
MARK WORTHINGTON JEWELLERS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 21 -
19
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
12,500
12,500
Between two and five years
10,417
22,917
22,917
35,417
20
Directors' transactions
Dividends totalling £1,688,000 (2022 - £2,066,000) were paid in the year in respect of shares held by the company's directors.
21
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
176,783
1,223,609
Adjustments for:
Taxation charged
43,156
291,262
Finance costs
236,786
199,936
Investment income
(14,601)
Depreciation and impairment of tangible fixed assets
14,500
Movements in working capital:
Decrease/(increase) in stocks
1,151,712
(775,634)
(Increase)/decrease in debtors
(31,342)
9,801
(Decrease)/increase in creditors
(66,050)
22,508
Cash generated from operations
1,496,444
985,982
22
Analysis of changes in net funds
1 May 2022
Cash flows
30 April 2023
£
£
£
Cash at bank and in hand
3,200,300
(864,545)
2,335,755
Bank overdrafts
(345,518)
269,795
(75,723)
2,854,782
(594,750)
2,260,032
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